China should look to Africa to counter overcapacity claims from the West, Africa Finance Corporation chief says

South China Morning Post
Wed, May 22, 2024

China should look to Africa to diversify its supply chains and counter overcapacity claims from the West, according to the head of the Africa Finance Corporation.

AFC chief executive Samaila Zubairu said China, a world leader in renewable energy, should consider moving part of the industry's supply chain to Africa, rather than seeing the continent as just the source of raw materials.


"Most of the [new energy] supply chain is in China. What we want China to do ... is to look at Africa as a way of diversifying the supply chain because Africa has minerals and metals to support this," Zubairu said during an interview in Doha.

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"Africa also has renewable energy sources, so the processing of these materials should have been in Africa."

The remarks come as China is facing accusations that its overcapacity has damaged manufacturing sectors in the West, particularly in new energy.

Zubairu said a bigger shift towards Africa could help to tackle concerns, particularly from Europe, about China's manufacturing overcapacity and carbon emissions.

"We're seeing the African market exists not just for Africa, but for the rest of the world," he said.

"Because if you process in Africa, you can use [Africa's] renewable energy to process, and you will have a lower carbon footprint. You can also export from Africa to Europe."

In Africa, an increasing number Chinese new energy products have been entering the market. Imports of new energy cars were up by 291 per cent in 2023 from the previous year, lithium battery imports grew 109 per cent, and photovoltaic products from China were up by 57 per cent.

But China's imports from Africa are still mostly raw materials such as crude oil, copper, cobalt and iron ore, which together made up more than half of the total imports in 2022. And while China's imports from Africa continued to rise that year, its trade surplus with the continent amounted to nearly US$47 billion.

China is investing more in new energy manufacturing, mostly electric vehicles, in wealthier nations on the continent such as Egypt, Morocco and South Africa. But most Chinese investment still goes to the traditional building materials, mining and construction sectors.


China's trade surplus with Africa was more than US$47 billion in 2022. Photo: AFP alt=China's trade surplus with Africa was more than US$47 billion in 2022. Photo: AFP>

China's outbound foreign direct investment in the electric vehicle sector - a key area for overcapacity concerns - is expected to reach a record high for 2023, with more than half of that investment in Europe, the Middle East and North Africa, and Asia, according to consultancy firm Rhodium Group.

More investment tends to go to North Africa because of the region's proximity to Europe and America.

Morocco, the biggest beneficiary in the region, has for example received multibillion-dollar contracts from Chinese and European new energy companies to set up manufacturing sites at Mohammed VI Tangier Science and Technology City - a Chinese-backed tech hub project.

Sub-Saharan Africa tends to miss out on investment from China because of the relatively low capacity of its manufacturing infrastructure.

Zubairu said most of the AFC's funds go to "developing and financing infrastructure, natural resources and industrial assets".

The AFC, a multilateral financial institution, is a key borrower with Chinese state policy lender the Export-Import Bank of China, or Exim Bank. In the latest transaction, Exim Bank agreed to advance another US$300 million to the AFC last year.

"We build the infrastructure that enables industrialisation to take place on the continent," Zubairu said.

He also touched on the intensifying US-China rivalry over trade and technology, saying it could be seen as an opportunity for Africa rather than a challenge.

"We were not fighting anybody. We don't really have any challenge with anybody about investments," he said. "We are open and ready to do business with anybody that wants to do business in Africa."

One such example is the Lobito Atlantic Railway. The US government has pledged a billion dollars to refurbish the railway - its first major project in Africa in decades - in a challenge to China's influence on the continent.

The railway will stretch 1,300km (808 miles) through mineral-rich Zambia and the Democratic Republic of Congo to create a logistics corridor to the Atlantic port of Lobito in neighbouring Angola.

Zubairu said African leaders also needed to take opportunities and make good business decisions. "Take ownership, take responsibility and act, and then people will follow," he said.

Copyright (c) 2024. South China Morning Post Publishers Ltd. All rights reserved.

Chinese Firms Jostle With US Peers for Sliver of Gulf Oil Riches


Archana Narayanan
Sun, Jun 2, 2024

(Bloomberg) -- A wave of Chinese banks, asset managers and hedge funds are ramping up in the Middle East, jostling with Wall Street firms who are making their own expansion push in a region flush with oil wealth.

Those efforts were on show in recent months, when a string of executives from China’s $1.35 trillion sovereign wealth fund made their way to the Middle East in the hope of finding a way to invest in the region.

Following a series of meetings with the region’s biggest alternative asset manager, the firms unveiled a first-of-its-kind $1 billion private equity fund and China Investment Corp. vowed to take an unusually hands-on role in scouting for deal targets.

That agreement comes at a time when Beijing’s soft-power has been on the increase in the Middle East — in recent days President Xi Jinping met Gulf leaders at a forum held in the Asian country. All that’s happening even as the US deepens its own Middle East push, while also scrutinizing growing ties between the region and China.

“The Gulf region was not always on the radar in the past decades for Chinese investors because they had really a lot of businesses going on with Europe and the US,” said China Merchants Bank International’s Chief Representative for the Middle East, Stephanie Holzhaider. The Middle East will see “big development for the next decade or two. That’s why Chinese companies are deploying with full force to set up their branches or offices to try to deepen presence in the market.” The firm recently set up an outpost in Dubai.

One big reason for the change is a slowing local economy in China, where firms are battling rising competition and waning consumption. The slump has been particularly acute in fields like technology and construction.

Meanwhile, Middle Eastern governments are plowing in billions of dollars to upgrade their infrastructure, offering Chinese companies and financial institutions new avenues for growth.

Full Operations

Analysts at HSBC predict that annual two-way foreign direct investment flows between Asia and the Middle East will reach $36 billion by 2035 from around $21 billion last year.

Chinese banks are now considering full service operations in the Gulf, rather than the small branches they’ve traditionally had. China Merchants Bank International started operations in Dubai’s financial center in April and it’s parent CMB Group will soon have both commercial and investment banking operations in the region.

Beijing’s state-owned China International Capital Corp has also ramped up in the Middle East in recent months, and hopes to give Middle Eastern investors more insight into China to encourage investment flows to the Asian country.

“We know that understanding China in a granular way is not easy to achieve without a presence in China or access to true China specialist institutions,” said Richad Soundardjee, regional managing director at CICC. “This has kept a number of investors in this region on the fence about adding China to their geographical mix.”

For more, read: Middle Eastern Wealth Flows to China Amid Anxiety About US Ties

Others building up a presence in the Gulf include Noah Holdings, one of China’s top wealth managers, which expects to get a business license in Dubai by the end of this year. Hong Kong’s Landmark Family Office is planning to set up an office in the emirate in the coming months.

Meanwhile, Infini Capital recently became the first Asian hedge fund to set up in the United Arab Emirates, joining peers from Europe and the US that have flocked to the country over the past few years.

Investment Destinations

To be sure, the US continues to be the among the most important investment destinations for the Middle East. Still, the region has been inching deeper into Bejing’s orbit — the UAE and Saudi Arabia are now part of the BRICS group.

The growing ties have already raised concerns in the US. Authorities there have boosted scrutiny of Middle Eastern wealth funds as part of a broader pushback on entities perceived to have close ties with Beijing, Bloomberg News reported last year.

Middle Eastern governments want “freedom to select their trade, tech, and security partners,” said analysts at Spain-based Sovereign Wealth Research at the IE University’s Center for the Governance of Change. But the Chinese expansion into the Gulf is at an early stage and the impact on US firms remains to be seen, they said.

Indeed, some of the sectors where Chinese firms are looking to invest in the Middle East are particularly sensitive from Washington’s perspective. Saudi Arabia and other Gulf countries like the United Arab Emirates have long been some of Washington’s closest partners in the region, particularly in defense.

US officials have balked at the possibility of the Gulf nations forging closer ties with China in high-end technology and artificial intelligence. Middle East firms have taken steps to assuage those fears: For instance, Abu Dhabi’s top AI firm G42 — backed by an influential royal — agreed to divest from China and pivot to American technology. The Emirati firm has since inked at least two deals with Microsoft Corp.

Still, Gulf states are prioritizing relationships that are likely to serve their national economic visions. Attracting foreign direct investment is a key priority for Saudi Arabia and officials in Riyadh describe China as an indispensable partner for Vision 2030 — Crown Prince Mohammed bin Salman’s multi-trillion-dollar economic and social transformation plan.

In recent days, Saudi Arabia has agreed to invest $2 billion in Lenovo Group Ltd., with the Chinese computer-maker pledging to open a manufacturing facility and establish regional headquarters in Saudi Arabia in return.

For Gulf countries, partnering with Chinese firms who can bring know how and technology in both traditional and new economy sectors, “creates a clear win-win opportunity for both sides,” said CICC’s Soundarjee.

 Bloomberg Businessweek

China’s CNGR Looks to Snap Up More Lithium Projects in Argentina

Yvonne Yue Li and Annie Lee
Sun, Jun 2, 2024

(Bloomberg) -- CNGR Advanced Material Co., a Chinese battery-component maker and Tesla Inc. supplier, is looking to buy major stakes in Argentina brine deposits to extend its foray into the lithium-rich region as it builds its own supply chain outside the Asian nation.

Senior CNGR executives visited at least three deposits in Argentina last week, according to people familiar with the matter. Those include the Jama project in Jujuy province and the Rincon project in Salta province, said one of the people, who asked not to be named as the information isn’t public.

CNGR is building an upstream lithium supply chain to serve customers in the western world, just as the US and allies are stepping up efforts to decouple from China’s global dominance over battery metals. The firm partnered with African private investment fund Al Mada in September to build an industrial base in Morocco and bought a 90% stake in Lithium Energy Ltd.’s Solaroz Lithium brine project in Argentina for $63 million in April.

The structure of CNGR’s investment will be similar to the one it made in April, according to the people. CNGR declined to comment when contacted by phone.

Prices of lithium — a key metal in electric-vehicle batteries — have fallen more than 80% from a late-2022 record as the market whipsawed from shortage fears to a supply glut. That has happened amid a growing backlash against EVs in some markets. Lithium’s collapse is creating havoc among producers, with stalled projects, scrapped deals and output cuts. Still, analysts have said low prices may create opportunities for acquisitions.

Argentina has the world’s third-largest lithium reserves after Chile and Australia, but the country has long struggled to lure the consistent, hefty international capital flows needed for mass development of oil, natural gas, gold and silver locked underground.

On the Wire

China’s manufacturing activity expanded at the fastest rate in almost two years in May, according to a private survey, contrasting with weak official data that dented the country’s growth outlook.

Australia has ordered Chinese-linked Yuxiao Fund and its associates to sell their stakes in rare earths miner Northern Minerals Ltd., part of an effort by US allies to counter the Asian nation’s dominance of critical minerals.

China’s shrinking CO2 emissions — evident in their 3% March decline — suggest policymakers are getting tougher on fossil fuel use as they push toward 2030’s climate goals.

IXM’s co-head of refined-metals trading is leaving the company, the latest in a series of personnel changes at the trading house owned by Chinese miner CMOC Group.

 Bloomberg Businessweek

China's new plan to dominate the future of tech will reshape the world

Linette Lopez
Updated Mon, June 3, 2024 

For technology to change the global balance of power, it needn't be new. It must simply be known.

Since 2017, the Chinese Communist Party has laid out careful plans to eventually dominate the creation, application, and dissemination of generative artificial intelligence — programs that use massive datasets to train themselves to recognize patterns so quickly that they appear to produce knowledge from nowhere. According to the CCP's plan, by 2020, China was supposed to have "achieved iconic advances in AI models and methods, core devices, high-end equipment, and foundational software." But the release of OpenAI's ChatGPT in fall 2022 caught Beijing flat-footed. The virality of ChatGPT's launch asserted that US companies — at least for the moment — were leading the AI race and threw a great-power competition that had been conducted in private into the open for all the world to see.

There is no guarantee that America's AI lead will last forever. China's national tech champions have joined the fray and managed to twist a technology that feeds on freewheeling information to fit neatly into China's constrained information bubble. Censorship requirements may slow China's AI development and limit the commercialization of domestic models, but they will not stop Beijing from benefiting from AI where it sees fit. China's leader, Xi Jinping, sees technology as the key to shaking his country out of its economic malaise. And even if China doesn't beat the US in the AI race, there's still great power, and likely danger, in it taking second place.

"There's so much we can do with this technology. Beijing's just not encouraging consumer-facing interactions," Reva Goujon, a director for client engagement on the consulting firm Rhodium Group's China advisory team, said. "Real innovation is happening in China. We're not seeing a huge gap between the models Chinese companies have been able to roll out. It's not like all these tech innovators have disappeared. They're just channeling applications to hard science."

In its internal documents, the CCP says that it will use AI to shape reality and tighten its grip on power within its borders — for political repression, surveillance, and monitoring dissent. We know that the party will also use AI to drive breakthroughs in industrial engineering, biotechnology, and other fields the CCP considers productive. In some of these use cases, it has already seen success. So even if it lags behind US tech by a few years, it can still have a powerful geopolitical impact. There are many like-minded leaders who also want to use the tools of the future to cement their authority in the present and distort the past. Beijing will be more than happy to facilitate that for them. China's vision for the future of AI is closed-sourced, tightly controlled, and available for export all around the world.

In the world of modern AI, the technology is only as good as what it eats. ChatGPT and other large language models gorge on scores of web pages, news articles, and books. Sometimes this information gives the LLMs food poisoning — anyone who has played with a chatbot knows they sometimes hallucinate or tell lies. Given the size of the tech's appetite, figuring out what went wrong is much more complex than narrowing down the exact ingredient in your dinner that had you hugging your toilet at 2 a.m. AI datasets are so vast, and the calculations so fast, that the companies controlling the models do not know why they spit out bad results, and they may never know. In a society like China — where information is tightly controlled — this inability to understand the guts of the models poses an existential problem for the CCP's grip on power: A chatbot could tell an uncomfortable truth, and no one will know why. The likelihood of that happening depends on the model it's trained on. To prevent this, Beijing is feeding AI with information that encourages positive "social construction."

China's State Council wrote in its 2017 Next Generation Artificial Intelligence Development Plan that AI would be able to "grasp group cognition and psychological changes in a timely manner," which, in turn, means the tech could "significantly elevate the capability and level of social governance, playing an irreplaceable role in effectively maintaining social stability." That is to say, if built to the correct specifications, the CCP believes AI can be a tool to fortify its power. That is why this month, the Cyberspace Administration of China, the country's AI regulator, launched a chatbot trained entirely on Xi's political and economic philosophy, "Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era" (snappy name, I know). Perhaps it goes without saying that ChatGPT is not available for use in China or Hong Kong.

The government of China has launched a chatbot trained entirely on Xi Jinping's political and economic philosophy.Xie Huanchi/Xinhua via Getty Images

For the CCP, finding a new means of mass surveillance and information domination couldn't come at a better time. Consider the Chinese economy. Wall Street, Washington, Brussels, and Berlin have accepted that the model that helped China grow into the world's second-largest economy has been worn out and that Beijing has yet to find anything to replace it. Building out infrastructure and industrial capacity no longer provides the same bang for the CCP's buck. The world is pushing back against China's exports, and the CCP's attempts to drive growth through domestic consumption have gone pretty much nowhere. The property market is distorted beyond recognition, growth has plateaued, and deflation is lingering like a troubled ghost. According to Freedom House, a human-rights monitor, Chinese people demonstrated against government policies in record numbers during the fourth quarter of 2023. The organization logged 952 dissent events, a 50% increase from the previous quarter. Seventy-eight percent of the demonstrations involved economic issues, such as housing or labor. If there's a better way to control people, Xi needs it now.

Ask the Cyberspace Administration of China's chatbot about these economic stumbles, and you'll just get a lecture on the difference between "traditional productive forces" and "new productive forces" — buzzwords the CCP uses to blunt the trauma of China's diminished economic prospects. In fact, if you ask any chatbot operating in the country, it will tell you that Taiwan is a part of China (a controversial topic outside the country, to say the least). All chatbots collect information on the people who use them and the questions they ask. The CCP's elites will be able to use that information gathering and spreading to their advantage politically and economically — but the government doesn't plan to share that power with regular Chinese people. What the party sees will not be what the people see.

"The Chinese have great access to information around the world," Kenneth DeWoskin, a professor emeritus at the University of Michigan and senior China advisor to Deloitte, told me. "But it's always been a two-tiered information system. It has been for 2,000 years."

To ensure this, the CCP has constructed a system to regulate AI that is both flexible enough to evaluate large language models as they are created and draconian enough to control their outputs. Any AI disseminated for public consumption must be registered and approved by the CAC. Registration involves telling the administration things like which datasets the AI was trained on and what tests were run on it. The point is to set up controls that embrace some aspects of AI, while — at least ideally — giving the CCP final approval on what it can and cannot create.

"The real challenge of LLMs is that they are really the synthesis of two things," Matt Sheehan, a researcher and fellow at the Carnegie Endowment for International Peace, told me. "They might be at the forefront of productivity growth, but they're also fundamentally a content-based system, taking content and spitting out content. And that's something the CCP considers frivolous."

In the past few years, the party has shown that it can be ruthless in cutting out technology it considers "frivolous" or harmful to social cohesion. In 2021, it barred anyone under 18 from playing video games on the weekdays, paused the approval of new games for eight months, and then in 2023 announced rules to reduce the public's spending on video games.

But AI is not simply entertainment — it's part of the future of computation. The CCP cannot deny the virality of what OpenAI's chatbot was able to achieve, its power in the US-China tech competition, or the potential for LLMs to boost economic growth and political power through lightning-speed information synthesis.

Ultimately, as Sheehan put it, the question is: "Can they sort of lobotomize AI and LLMs to make the information part a nonfactor?"

Unclear, but they're sure as hell going to try.

For the CCP to actually have a powerful AI to control, the country needs to develop models that suit its purpose — and it's clear that China's tech giants are playing catch-up.

The e-commerce giant Baidu claims that its chatbot, Ernie Bot — which was released to the public in August — has 200 million users and 85,000 enterprise clients. To put that in perspective, OpenAI generated 1.86 billion visits in March alone. There's also the Kimi chatbot from Moonshot AI, a startup backed by Alibaba that launched in October. But both Ernie Bot and Kimi were only recently overshadowed by ByteDance's Doubao bot, which also launched in August. According to Bloomberg, it's now the most downloaded bot in the country, and it's obvious why — Doubao is cheaper than its competitors.

"The generative-AI industry is still in its early stages in China," Paul Triolo, a partner for China and technology policy at the consultancy Albright Stonebridge Group, said. "So you have this cycle where you invest in infrastructure, train, and tweak models, get feedback, then you make an app that makes money. Chinese companies are now in the training and tweaking models phase."

The question is which of these companies will actually make it to the moneymaking phase. The current price war is a race to the bottom, similar to what we've seen in the Chinese technology space before. Take the race to make electric vehicles: The Chinese government started by handing out cash to any company that could produce a design — and I mean any. It was a money orgy. Some of these cars never made it out of the blueprint stage. But slowly, the government stopped subsidizing design, then production. Then instead, it started to support the end consumer. Companies that couldn't actually make a car at a price point that consumers were willing to pay started dropping like flies. Eventually, a few companies started dominating the space, and now the Chinese EV industry is a manufacturing juggernaut.

Similar top-down strategies, like China's plan to advance semiconductor production, haven't been nearly as successful. Historically, DeWoskin told me, party-issued production mandates have "good and bad effects." They have the ability to get universities and the private sector in on what the state wants to do, but sometimes these actors move slower than the market. Up until 2022, everyone in the AI competition was most concerned about the size of models, but the sector is now moving toward innovation in the effectiveness of data training and generative capacity. In other words, sometimes the CCP isn't skating to where the puck's going to be but to where it is.

There are also signs that the definition of success is changing to include models with very specific purposes. OpenAI CEO Sam Altman said in a recent interview with the Brookings Institution that, for now, the models in most need of regulatory overhead are the largest ones. "But," he added, "I think progress may surprise us, and you can imagine smaller models that can do impactful things." A targeted model can have a specific business use case. After spending decades analyzing how the CCP molds the Chinese economy, DeWoskin told me that he could envision a world where some of those targeted models were available to domestic companies operating in China but not to their foreign rivals. After all, Beijing has never been shy about using a home-field advantage. Just ask Elon Musk.

To win the competition to build the most powerful AI in the world, China must combat not only the US but also its own instincts when it comes to technological innovation. A race to the bottom may simply beggar China's AI ecosystem. A rush to catch up to where the US already is — amid investor and government pressure to make money as soon as possible — may keep China's companies off the frontier of this tech.

"My base case for the way this goes forward is that maybe two Chinese entities push the frontier, and they get all the government support," Sheehan said. "But they're also burdened with dealing with the CCP and a little slower-moving."

This isn't to say we have nothing to learn from the way China is handling AI. Beijing has already set regulations for things like deepfakes and labeling around authenticity. Most importantly, China's system holds people accountable for what AI does — people make the technology, and people should have to answer for what it does. The speed of AI's development demands a dynamic, consistent regulatory system, and while China's checks go too far, the current US regulatory framework lacks systemization. The Commerce Department announced an initiative last month around testing models for safety, and that's a good start, but it's not nearly enough.

If China has taught us anything about technology, it's that it doesn't have to make society freer — it's all about the will of the people who wield it. The Xi Jinping Thought chatbot is a warning. If China can make one for itself, it can use that base model to craft similar systems for authoritarians who want to limit the information scape in their societies. Already, some Chinese AI companies — like the state-owned iFlytek, a voice-recognition AI — have been hit with US sanctions, in part, for using their technology to spy on the Uyghur population in Xinjiang. For some governments, it won't matter if tech this useful is two or three generations behind a US counterpart. As for the chatbots, the models won't contain the sum total of human knowledge, but they will serve their purpose: The content will be censored, and the checks back to the CCP will clear.

That is the danger of the AI race. Maybe China won't draw from the massive, multifaceted AI datasets that the West will — its strict limits on what can go into and come out of these models will prevent that. Maybe China won't be pushing the cutting edge of what AI can achieve. But that doesn't mean Beijing can't foster the creation of specific models that could lead to advancements in fields like hard sciences and engineering. It can then control who gets access to those advancements within its borders, not just people but also multinational corporations. It can sell tools of control, surveillance, and content generation to regimes that wish to dominate their societies and are antagonistic to the US and its allies.

This is an inflection point in the global information war. If social media harmfully siloed people into alternate universes, the Xi bot has demonstrated that AI can do that on steroids. It is a warning. The digital curtain AI can build in our imaginations will be much more impenetrable than iron, making it impossible for societies to cooperate in a shared future. Beijing is well aware of this, and it's already harnessing that power domestically, why not geopolitically? We need to think about all the ways Beijing can profit from AI now before its machines are turned on the world. Stability and reality depend on it.

Linette Lopez is a senior correspondent at Business Insider.

The rise of Huawei, the controversial Chinese tech giant that rivals Apple and is seen as a US national security threat

Aaron Mok,Jordan Hart
Sun, June 2, 2024 

Huawei, a Chinese telecommunications company, has become one of the world's biggest tech names.

It started off manufacturing equipment before venturing into smartphones and more.

Here's how it rose to compete with tech titans like Apple.

Huawei has become one of the world's biggest, most controversial tech companies over nearly 40 years.

The Chinese tech giant started as one of the world's leading networking equipment producers, making items such as base stations, routers, modems, and switches that provide phone service and internet access worldwide.

It has expanded its product line to include wearable devices and, most notably, smartphones, which have become a major competitor to Apple's iPhone in China.

The company had about 207,000 employees as of 2023 and operates in over 170 countries and regions. In the same year, Huawei hit nearly $100 billion in revenue and more than $12 billion in profit.

Ren Zhengfei, the CEO and founder of Huawei, came from humble beginnings but was worth $1 billion as of 2022, according to Forbes.

Still, the company has been mired in controversy, with the US accusing the Chinese company of stealing trade secrets.

Here's how a tiny IT technology firm in China became a rival to Apple — and became seen as a national security threat in parts of the world.

Ren Zhengfei founded Huawei in 1987 when he was 44 years old in an apartment in Shenzhen, China.

Ren Zhengfei is the 79-year-old CEO of Huawei.Reuters

Ren said Huawei's registered capital was roughly 21,000 yuan, or just under $3,000 as of May 2024. He said he didn't receive "a single penny" from the Chinese government and pooled funds from outside investors.

The CEO said he had no experience building a company.

Huawei started as a reseller of telephone switch equipment made by a Hong Kong manufacturer.

"We worked very hard and made our first money during those early years," Ren said in Huawei's docu-series.

When Huawei's business boomed, the Hong Kong company stopped supplying Huawei with routers, forcing the startup to develop its own telecommunication products.

Huawei focused on research and development for its initial telecom products during the 90s.

Employees worked around the clock when Huawei first started out.INDRANIL MUKHERJEE/AFP via Getty Images

Since major cities in China were dominated by big players, Huawei sold telecom equipment to rural areas that could withstand harsh weather conditions.

By 1995, the company generated nearly $220 million in sales, according to the BBC.

Lyu Ke, a member of Huawei's supervisory board, said in the company's docu-series that during its early days, employees worked day and night without leaving the building for almost a month.

"If you feel tired, you go for sleep, take a shower, and go back to work," Lyu said.

In the 2000s, Huawei decided to expand its operations beyond China.

Huawei's first years weren't easy.Costfoto/NurPhoto via Getty Images

The first few years in the overseas market were rough as they struggled to sell their equipment to customers.

"After I started Huawei, it was very difficult to ensure the company's survival," Ren said in a 2019 interview with CBS.

By 2000, its international sales reached US$100 million, and by 2005, international contract orders exceeded domestic sales for the first time.

During its foray beyond China, Huawei started to enter the consumer device market.


The Huawei U626 (pictured) was the company's first 3G phone.Ricky Wong/MCT/Tribune News Service via Getty Images

In 2004, the company shipped its first phone, the C300, with features like basic voice calls and SMS, a text messaging service.

Two years later, the company released the Huawei U626 — its first 3G phone — with a color screen, camera, and faster data connectivity, an effort to enter the advanced phone market.

The company released a USB modem in 2006, which could be plugged into computers to access the internet.

By the late 2000s, Huawei reached a series of financial milestones.

Despite some rough years, Huawei carried on through the 2000s.STR/AFP via Getty Images

Between 2008 and 2009, contract sales increased by 46% — most of which came from overseas — and generated close to $23.3 billion in revenue, according to Reuters. The company was also seeking to expand in the US.

Following the success of its smartphones, Huawei expanded into wearable devices

Since the success of its cellphones, Huawei has ventured into more smart devices.Michael Dalder/Reuters

In 2015, the company released the Huawei watch, which combined typical watch functions with modern smartwatch features.

By 2019, the telecom giant seemed to be leading the 5G revolution for faster wireless connection globally

Huawei founder Ren Zhengfei remains CEO.AP Photo/Vincent Yu

As of February 2019, the company had more than 30 contracts for 5G and deployed more than 40,000 5G stations globally, the LA Times reported, demonstrating its global influence. Huawei execs claimed that the company was ahead of America's most advanced providers in developing the technology.

Huawei employees reportedly say the pay is stellar despite the tough work environment.

Huawei is known for its intense work culture.Tingshu Wang/Reuters

One former employee said workers get juicy bonuses that "usually exceed our base salary" for finishing projects.

"It's just obscene amounts," the employee told the LA Times in 2019.

Another employee told the outlet that Huawei gives employees the option to buy company shares if they hit performance goals.

The compensation for workers seemed to have offset the company's so-called "wolf culture," where some were expected to take on the work of three people, sources told the LA Times.

In performance reviews, Chinese staff are reportedly ranked A, B, C, or D, where workers are pitted against one another to succeed.

Workers who received a score of A got double the bonuses employees who scored B got, a Shenzhen-based employee told the Times. Those who scored C — which 10% of staff must get — for two consecutive years were fired.

Huawei's smartphones, one of its most successful consumer products, are now a rival to Apple's iPhone in China

The Huawei Mate 60 rivals the latest iPhone.Wang Gang/Getty Images

The company introduced Ascend, its first line of smartphones, in 2010 in a move to enter the global smartphone market following the release of the iPhone.

Two years later, Huawei launched the Ascend P1 S, which was said to be one of the thinnest smartphones in the world at the time. It later released high-end phones like the Mate and P Lines, and lower-end devices with its offshoot brand Honor.

Still, Huawei's ascent to the international arena has included controversies

Huawei faced major accusations regarding confidential information from multiple companies.Costfoto/NurPhoto via Getty Image

In 2003, hardware giant Cisco sued Huawei, accusing the company of stealing network router technology, which Huawei eventually settled.

Then, in 2010, Motorola hit the Chinese company with a suit alleging that Huawei conspired with several Motorola workers to steal trade secrets. Motorola agreed to drop the suit in 2011.

And in 2017, a jury decided that Huawei misappropriated trade secrets belonging to T-Mobile in a series of incidents that occurred in 2012 and 2013.

The United States saw Huawei as a potential threat to national security

Donald Trump signed an executive order that banned Huawei products from the US in 2019.Getty Images

The US and other countries have expressed concerns that Huawei's equipment could be used for espionage by China.

In 2012, the US House of Representatives Intelligence Committee released a report asking US companies to avoid using Huawei products because of cybersecurity concerns. In 2018, AT&T killed a deal with Huawei to sell its smartphones across America.

Between 2017 and 2018, as tensions between the country and the company rose, the Donald Trump administration restricted federal agencies like the Department of Defense from using the telecom giant's equipment.

In 2019, the US cracked down even further on Huawei, with former president Trump signing an executive order laying the groundwork to block it from selling equipment in the country. The blacklisting has since been expanded, and diplomatic tensions between China and the US have also ramped up.

In 2018, Meng Wanzhou, the CEO's daughter who is also Huawei's CFO, was detained in Canada on fraud and sanctions violation charges

Huawei CFO Meng Wanzhou.REUTERS/Lindsey Wasson

Meng Wanzhou was detained in Canada and subsequently placed under house arrest on extradition request by the US DOJ under the indictment of bank and wire fraud. The US accused her of sidestepping sanctions on Iran by selling technologies through the company Skycom.

The CFO awaited extradition to the US for three years.

In 2021, she was released from house arrest and returned home to China as part of an agreement with the US Justice Department.

Huawei continues to step up its competition against the iPhone in China

Huawei's new Pura70 phone has three cameras, just like the iPhone Pro.CFOTO/Future Publishing/Getty Images

As of early 2024, Apple lost its edge in China in smartphone sales, a major market, to local rivals like Huawei as iPhone sales declined.

Huawei's $960 Mate 60 Pro debuted in 2023 and wowed consumers and analysts as a viable alternative on the heels of an iPhone ban for Chinese government officials.

As if the Mate 60 wasn't enough, in 2024, Huawei introduced another series of smartphones called the Pura 70, starting at $760.

Huawei didn't immediately respond to Business Insider's request for comment before publication.

LA REVUE GAUCHE - Left Comment: Search results for Canada's Huawei 5G ban

Krugman Says China Is ‘Bizarrely Unwilling’ to Boost Demand

Bloomberg News
Sun, Jun 2, 2024

(Bloomberg) -- China’s leaders are “bizarrely unwilling” to use more government spending to support consumer demand instead of production, according to Nobel laureate in economics Paul Krugman.

“The fact that we seem to have a complete lack of realism on the part of the Chinese is a threat to all of us,” Krugman told Bloomberg TV’s Shery Ahn and Haidi Stroud-Watts in an interview on Monday, where he also touched on Japan’s economy and the benefits of a weak yen.

Krugman echoed criticism by US economic officials including Treasury Secretary Janet Yellen that China can’t simply export its way out of trouble. The comments come amid renewed concern in the US and Europe over what is viewed as Chinese overproduction and the dumping of heavily subsidized products overseas.

“We can’t absorb, the world will not accept everything China wants to export,” Krugman said on Bloomberg TV’s The Asia Trade program.

China’s whole economic model is not sustainable because of “vastly inadequate” domestic spending and a lack of investment opportunities, he added. Beijing should be supporting demand not more production, he said.

Another prominent economist, Stephen Roach, weighed in on China’s economy on Monday. He said he found a grim mood on the ground in Beijing during a visit recently, especially among entrepreneurs and students.

“I found a Beijing that really didn’t have much of the spark that I had been accustomed to over my many years of traveling there,” Roach said in a Bloomberg TV interview. “Certainly the best I could call it was a mood of grim resignation,” said the former chairman of Morgan Stanley Asia who now teaches at Yale University

A regular policy adviser to the Chinese government, Li Daokui, predicted more supportive policies for the economy in the coming months. Speaking to Bloomberg TV, the Chinese economist called on Beijing to issue much more central government debt to make up for the inability of cash-strapped local authorities to spend money and drive growth.

On Japan

Looking beyond China, Krugman said he found it hard to understand why Japanese authorities are panicking over a weaker yen that helps boost demand in that economy.

“I have to say what puzzles me is why Japan is so worried about the falling yen,” Krugman said.

“A weaker yen, after give it a bit of a lag, that’s actually positive for demand for Japanese goods and services,” Krugman said. It’s “puzzling why the weaker yen is inspiring as much panic as it seems to be.”

Krugman spoke after a government report Friday showed Japan spent a record amount to defend the currency in the past month. After the actions by the government side, the BOJ is increasingly seen likely to raise rates by July to ease pressure on the yen.

Krugman, now at the City University of New York, isn’t all convinced that Japan is finally having sustainable inflationary pressures.

‘A Long Way’

“I hope so, but I’m not convinced by trying to look at the Japanese data,” Krugman said. “I still don’t see the kind of fundamental strength. A lot of Japan’s long-term weakness has to do with demography, has to do with extremely low fertility. That hasn’t changed, although Japan is at least more open to immigration than it used to be. But it’s a long way.”

Japan’s economy contracted in the last quarter, extending a period of no growth starting from the middle of last year. That underscored a lack of momentum even after the BOJ ended its massive monetary easing program in March with the first rate hike in 17 years.

The biggest driver for the yen weakening is a wide interest rate gap with the Federal Reserve. While few expect the Fed to cut rates soon on the back of sticky inflation, Krugman reiterated his view that it’s better to cut rates soon with the chance of re-accelerating inflation looks very small if the Fed cuts rates.

“I would go for the rate cut if only to signal, hey, you know, we’re not asleep here, we’re not going to be obsessed with inflation until that’s so far in the rear-view mirror that we really should have been focusing on the car wreck in front of us,” Krugman said.

--With assistance from Adrian Wong, Lucille Liu, Stephen Engle, Yvonne Man and David Ingles.

(Updates with comments from Chinese economist in eighth paragraph)

Most Read from Bloomberg Businessweek

Airbus CEO blames global trade wars on the U.S. rather than China, citing old subsidy spat with Boeing


Fortune· OZAN KOSE/AFP via Getty Images

Ryan Hogg
Mon, Jun 3, 2024, 

The CEO of Airbus has a view on who’s to blame for the trade wars that have engulfed the global economy, but unusually he’s not pointing fingers at China.

Speaking to German publication Frankfurter Allgemeine Zeitung, Guillaume Faury agreed that the rise in protectionism had forced the company to engage in more “nearshoring” as a security measure for its supply chain. It currently manufactures 60% of its aircraft in Europe, and 20% each in the U.S. and China.

But he diverged from the typical Western sentiment of blaming China for rising hostilities. Instead, Faury appeared to point the blame at Europe’s greatest ally, the U.S.

“Trade wars are in full swing. And I want to remind you that in recent years, it was not the Chinese who imposed tariffs on European aircraft, but the Americans,” Faury said.

“When Xi Jinping came to Paris in early May, he called Airbus a success for China.”
Airbus’s U.S. headache

Faury’s comments go against the grain for European CEOs, but they are perhaps unsurprising given his company’s occasionally turbulent transatlantic relations.

Airbus and rival Boeing have been at the center of a decades-long trade dispute between Europe and the U.S., which accused the EU of providing Airbus with illegal state subsidies through cheap loans, an argument the World Trade Organization (WTO) agreed with.

As a result, the Donald Trump administration hit Europe with a 10% tariff on aircraft in 2019. The dispute ended after the EU threatened to impose 15% tariffs on U.S. aircraft for similar subsidies to Boeing.

There are some parallels with the EU’s current probe into Chinese automakers including BYD and Geely. The bloc is expected to slap import tariffs on Chinese EVs in the coming months, adding to the protectionism hitting global trade.

Faury’s interview will do little to ease the tension, particularly given the series of recent calamities at its main rival Boeing, which have helped Airbus to grab global market share.

The American firm’s 737 Max plane was grounded for nearly two years after two fatal crashes in the space of five months in 2019 and 2020.

As it appeared to be overcoming that setback, Boeing was then hit by a blowout on an Alaska Airlines flight in January, forcing the grounding of nearly 200 737 Max 9 jets and plunging Boeing back into a crisis of confidence.

A representative for Airbus didn’t immediately respond to Fortune’s request for comment.
Global conflict

Not just preoccupied with trade wars, the Airbus boss is also concerned with how Europe is preparing for the bullets-and-rockets variety, as the Russia-Ukraine conflict barrels on and tensions rise in the Middle East.

Here Faury highlighted Europe’s overreliance on American weapons.

The EU and the U.S. have often been at loggerheads over European NATO members generally falling short of spending the requisite 2% of GDP on their militaries. On this point, Faury seems to agree with the States.

Faury pointed out that the U.S. spent five times the amount that the EU did on armaments, and that up to three-quarters of what Europe did spend was on weapons produced in America.

The EU needed to address the inevitable fractures that come from several separate governments trying to cooperate on arms procurement, Faury said.

“Each European country has its own armed forces and national interests, while the U.S.A. only has one air force, one navy, and one army. European needs are not synchronized.”

Faury also called for a security and defense agreement between the EU and the U.K.

This story was originally featured on Fortune.com

Gen Z hit harder by inflation than other age groups. But relief may be coming.

Paul Davidson, USA TODAY
Updated Mon, Jun 3, 2024

Freshly minted college graduates are grappling with more than just trying to land their first jobs.

There’s the cost of rent. And eating out with friends. And gasoline. And car insurance.

Gen Z members (born between 1997 and 2012) have been hit harder by inflation than all other age groups, and the effects could cast a shadow over their financial health for years to come, according to studies by Moody’s Analytics and TransUnion, the credit reporting agency.

“Gen Z’s experience with inflation has been different than all other generational cohorts,” says Moody’s economist Matt Colyar. “It’s been hotter.”

Young adults, ages 12 to 27, are bearing the brunt of a historic spike in prices over the past few years that has financially strained most Americans. That's because Gen Z's incomes are lower because they’re just entering the workforce. And they’re big consumers of some of the chief inflation drivers, like housing and meals out, Colyar says.

But relief appears to be on the horizon, with some of those price increases poised to slow in coming months.
How much has inflation slowed?

Overall inflation has eased substantially from a 40-year high of 9.1% in mid-2022, according to the Labor Department’s consumer price index (CPI). But after dropping last year, it picked up in early 2024 and has been stuck at about 3.4% since autumn.

Moody’s crunches government data on the share of income each age group spends on various goods and services tracked by the Labor Department. It uses that information to come up with a generation-specific CPI that's roughly similar to the broader index.
What generation is most affected by inflation?

Based on that generation-specific measure, yearly inflation in March was running about half a percentage point higher for Gen Z than for every other cohort − millennials, Gen X, baby boomers and the "silent" and "greatest" generations − a significant difference.

Besides earning lower incomes than other age groups, young Americans buy a disproportionate share of products and services that have soared in price. For instance, they devote nearly 20% of their income to rent, averaged across the entire age group, compared to 7% for the average American, Moody’s data shows.

Few Gen Z members own their homes, which means those who aren’t still living with their parents or other relatives are probably renting. Rent has jumped 5.4% in the past year and 21% since early 2021, the CPI shows. And housing broadly has accounted for 36% of the rise in consumer prices in recent months.

Young people also spend 5.5% of their income on dining out, compared with 4.5% for the average person; 5.3% on gasoline versus an average of 3.2%; and 2.6% on auto insurance versus an average of 2.3%, the Moody’s analysis shows.

Auto insurance has leaped almost 23% in the past year, and young Americans typically pay higher premiums because insurance companies believe they’re more likely to get into accidents and make poor decisions.

Hannah Mains in her graduation gown at Auburn University
'Living paycheck to paycheck'

Hannah Mains, 22, who graduated this month from Auburn University in Alabama, has two part-time jobs: marketing manager for a staffing firm in the clothing industry and stylist for a clothing subscription service.

But her pay for the 25 hours a week she logs is barely enough to cover her sharply rising bills for utilities, car insurance, groceries, dining out and other items, even with her parents covering the rent for the off-campus apartment she continues to share this summer. Her auto insurance premium has climbed $200 to $300 a year in the past few years, she estimates.

“I still find myself living paycheck to paycheck,” Mains says, and hasn’t been able to build any savings.

Mains, who majored in apparel merchandising and media studies, has applied to hundreds of public relations and marketing jobs but has had just a few interviews in a cooling labor market. New grads are competing not just among themselves but with laid-off white-collar workers in fields such as tech and consulting, according to a LinkedIn report.

Although she eats out with college friends three or four times a week, she has been gravitating to restaurants and bars that offer discount specials.

At the end of the summer, she plans to move back in with her parents in Atlanta and hunt for a PR or marketing job in New York City or Los Angeles. She isn’t sure how she’ll afford the astronomical rents.

“It’s definitely disheartening, but it’s just how it is."
What is the average credit card debt held by Gen Z?

The additional costs that Gen Zers face have led them to amass more credit card debt than millennials at the same age, according to a TransUnion study last month. Gen Zers ages 22 to 24 had an average credit card balance of $2,834 late last year, compared with an inflation-adjusted $2,248 for millennials at the same age in late 2013.

And 1.6% of Gen Z card holders were 60 or more days delinquent on their payments in late 2023, vs. 1% of Millennials a decade ago.

“Gen Z is struggling more than millennials did 10 years ago,” says Michele Raneri, vice president and U.S. research head at TransUnion.

Although Gen Zers and millennials each dealt with a crisis – the Great Recession and pandemic downturn, respectively – inflation has left Gen Zers more debt-burdened, Raneri says. In 2021 and 2022, they benefited from COVID-19-related stimulus checks and other federal aid. But that money largely has run dry, forcing many in that age group to turn to credit cards or other types of loans, she says.

The government’s financial cushion is gone, but the spending may have “turned into a habit (they) can’t afford,” Raneri says.

Such debt can weigh on young adults and affect their credit scores for years because they haven’t yet built credit histories, says Charlie Wise, TransUnion’s senior vice president and global research head. Today's historically high interest rates make that debt particularly onerous, Raneri says.

The outlook, however, isn’t all gloomy for young Americans.

Gen Z’s median inflation-adjusted wages have been higher than those of previous generations at the same age. And they’ve risen faster, at least partly offsetting the higher costs, Colyar says, citing Federal Reserve data. Many work in industries − such as restaurants, hotels and retail − that have boosted pay sharply in response to pandemic-related labor shortages.

Also, young adults tend to switch jobs more often than older colleagues to take advantage of bigger raises, Colyar says.

“Gen Z went to work when there was a ‘help wanted’ crisis,” he says.
What is the forecast for inflation in 2024?

He says the cost of services hit hardest by inflation should rise more slowly or stabilize in the coming months. Rent for new leases has dropped, but that change has been slow to filter through to tenants on existing leases. It should happen, though, by the second half of the year, Colyar says.

The rise in car insurance costs should also ease in the months ahead, he says. New car prices have dropped recently, and that should moderate insurance premium increases, Colyar says.

At the same time, Gen Zers devote much less of their income to health care, an expense that's projected to rise dramatically this year.

“Relief is on the way,” Colyar says.

Paul Davidson covers the economy for USA TODAY.

This article originally appeared on USA TODAY: Inflation has squeezed Gen Z more than other age groups

Pro-Palestinian demonstrations at UT-Austin open rift among Jewish students

Ikram Mohamed

TEXAS TRIBUNE
Sun, June 2, 2024 

A student draped with an Israeli flag listens as University of Texas at Austin professors Pavithra Vasudevan and Karma Chavez lead students in a discussion during a pro-Palestinian teach-in on campus on Tuesday, April 30, 2024. Credit: Eli Hartman/The Texas Tribune


In early April, Jadd Hashem and Elijah Kahlenberg sat at a table between the Texas Hillel’s annual Israel Block Party at the University of Texas at Austin and a demonstration organized by the Palestinian Solidarity Committee. A sign taped at the front of their table read: “One Palestinian. One Jew. Two Brothers. Ask us anything.”

For three and a half hours, Kahlenberg and Hashem talked to anyone who was interested about the Israel-Hamas war and the decades-long tensions in the Middle East. Most exchanges were cordial but toward the end a conversation got heated with a person who said she had survived the Oct. 7 attack Hamas launched on Israel.

Kahlenberg said a crowd of Israel supporters soon gathered around them, not just criticizing the two friends’ views on the conflict but questioning his Jewishness. He said he was called a self-hating Jew and a Kapo, a term referring to Jewish inmates in concentration camps who were appointed to oversee other prisoners.


“Jadd is Palestinian, of course, he's gonna have these views and they're gonna be against it,” Kahlenberg said. “But for me, they were like, ‘oh, Elijah, this guy is a traitor.’”

Since tensions exploded on U.S. campuses in response to the Israel-Hamas war, some Jewish students at UT-Austin have urged state and university leaders to express their support for Israel while others have participated in pro-Palestinian demonstrations. The rift has left many Jewish students with a wide range of views on the conflict feeling unsafe, highlighting the difficulty of holding discussions about the Middle East conflict at Texas universities.

On Oct. 7, Hamas, a Palestinian militant group, attacked the Tribe of Nova music festival in Re'im, Israel, killing more than 1,100 people and taking 253 hostages. Israel responded with a siege on Gaza that has killed about 35,300 Palestinians and left over 79,000 injured.

Student protesters, confronted by a heavy police presence, link arms to stymie arrests on the University of Texas campus on April 24, 2024. Credit: Julius Shieh/The Texas Tribune

The war sparked fierce pro-Palestinian demonstrations across U.S. campuses. At UT-Austin, hundreds of students walked out of class on April 24 to protest the siege on Gaza, leading to the arrest of 57 people after police ordered them to disperse. Five days later, 79 more people were arrested after protesters tried to set up an encampment on campus grounds.

Some students, faculty and free speech experts have criticized the university and law enforcement response as heavy-handed. UT-Austin officials defended their actions saying encampments are against university rules and some state leaders lauded the police crackdowns while blasting the demonstrations as antisemitic.

The protests have also triggered different feelings, reactions and opinions among Jewish students.

Levi Fox, a sophomore at the University of Texas at Austin, said he was in his Jewish fraternity house on Oct. 9 when he got a call that one of his friends was among the victims of the Hamas attack.

“I collapsed to my knees crying,” he said. “To know someone that was murdered in such a brutal way … it gave me a whole new perspective on what's going on.”

Since then, Fox has participated in several counter-protests in response to the pro-Palestinian demonstrations. During a May 14 hearing before the Texas Senate Subcommittee on Higher Education to discuss the protests, Fox said he’s had pennies thrown at him, a student told him to “go back to Germany” and a professor told him “they’ll come after you and put you in the ovens next.” He said he gave the professor’s name to senators but didn’t want to share it publicly because the university is investigating the incident.

Fox told lawmakers some students have taken off their yarmulkes or hidden Stars of David hanging around their necks to avoid being harassed.

“When someone, of any faith, feels like they need to hide their faith, that is a failure on all of us,” Fox said. “State leaders have a responsibility to ensure that everyone can express their faith without fear.”

Seats fill in the hearing and overflow rooms at the Texas Senate Subcommittee on Higher Education hearing on free speech on May 14, 2024. Credit: Leila Saidane for The Texas Tribune

Fox said he felt the pro-Palestinian demonstrations were inherently antisemitic and applauded the university and law enforcement for their response.

“When you say, ‘There is only one solution, Intifada revolution,’ you are saying that the only solution is a brutal and violent series of terrorist attacks targeted toward civilians,” Fox said. “You cannot blame the state of Texas and the university for working to ensure the safety of civilians when violent threats like that are made. That has no place here at UT-Austin or anywhere in the world for hate or violence.”

Barri Seitz, a UT-Austin sophomore, said she was also grateful for the swift action against the demonstrators. She said some people at smaller protests have called her slurs and told her “to go back to Poland.”

She said she believed protesting against Israel is antisemitic, stating that Judaism and Zionism are intrinsic parts of one another and that someone Jewish who doesn’t support Israel is denying a large part of their identity.

Carla Robinson, a Jewish UT graduate student who’s been protesting in support of Palestinians, said that statements like these have been hurtful and frustrating to hear. She said Israel and Zionism are not the same as Judaism.

“I think antisemitism is being weaponized to stifle criticism of the state of Israel and the genocide it's carrying out against Palestinian people,” Robinson said. “It makes antisemitism meaningless when you expand the definition in that way to include critique of Israel, which then makes it harder to address real antisemitism that's happening, along with Islamophobia and racism and sexism.”

Sam Law, a Jewish UT-Austin graduate student, said he was proud of participating in pro-Palestinian demonstrations and angered at the university’s decision to call the police on their own students. He was among the protesters arrested at UT-Austin on April 29.

Law said many of his relatives were killed in concentration camps in Poland during World War II and that hearing those stories from his family made him empathize with Palestinians’ suffering.

Sam Law, a Jewish doctoral student at UT-Austin who is sympathetic to the Palestinians' plight in Gaza, poses for a photo in the Fine Arts Library on May 23, 2024. Credit: Maria Crane/The Texas Tribune

Sam Law smokes a cigarette shortly after being released from the Travis County Jail on April 30, 2024. Law was arrested the previous day at a demonstration on the UT campus in support of Palestinians. Credit: Eli Hartman/The Texas Tribune

Many lawmakers and alumni have thanked UT-Austin President Jay Hartzell for his response to the protests on campus. A letter published by Alums for Campus Fairness, an alumni group that seeks to counter antisemitism and the “demonization of Israel” on college campuses, said the protests have “sought to silence Jewish students.”

Law said people like Harlan Crow — a GOP mega-donor and a UT-Austin alum who has been criticized for owning a collection of Nazi artifacts and was among the signatories of the Alums for Campus Fairness letter — are the ones that make him feel unsafe. He also condemned the university for allowing some speakers like Kate Hopkins, a far-right personality who has stirred controversy for echoing Nazi rhetoric and was invited by a student group to visit the campus in 2018.

Lawmakers, university officials and the alumni “can claim all they want that what they're doing is about protecting Jewish safety, but this is not true,” Law said. “The people who've made me feel unsafe are them.”
Difficult conversations

Aaron Sandel, a UT-Austin professor in anthropology who is Jewish, said he saw many Jewish students struggle to sort their thoughts and voice concerns about their safety in the wake of the Israel-Hamas war. Believing that complex feelings should be processed privately and with friends, he offered to facilitate an open discussion at his home one day in October. Sandel wanted to help students distinguish between feeling unsafe and uncomfortable, which he said are often confused.

“Discomfort should be reduced and addressed, and we don't want people feeling uncomfortable if it's stressing them out and distracting them. But discomfort can sometimes be a necessary part of thinking through difficult issues,” he said.

About 10 Jewish graduate students, faculty members and friends sat in Sandel’s living room voicing different opinions and feelings about the Middle East conflict and the discomfort they have felt on campus.

While there were disagreements, Sandel said the conversation never turned tense. He said it was similar to a classroom discussion in which people disagree without becoming disrespectful.

Sandel believes the discussion allowed students to find others they could turn to when they need someone to confide in.

Law attended the discussion Sandel hosted and said it was one of the hardest conversations he’s had. But he felt it helped attendees better understand each other’s stances.

Kahlenberg, the student who set up a table with his Palestinian friend in April, said he founded the student group Atidna two years ago also in hopes of fostering an open dialogue about the Middle East conflict and advancing the idea that Jews and Arabs don’t need to be enemies.

While Kahlenberg says Atidna is an apolitical organization, he and Hashem, the group’s vice president and Kahlenberg’s best friend, have participated in pro-Palestinian demonstrations calling for a ceasefire.

Kahlenberg said he’s felt less welcome in Jewish spaces lately because of his views. It’s a feeling that has made him stay home rather than celebrate holidays with others in the Jewish community.

“I do not want to be in a holiday setting or in a Shabbat or adjacent setting where I have to justify why I think Palestinians deserve to live,” Kahlenberg said. “To me, that's not worth my time and not worth my safety. There are people that might be very abrasive to me being in that space, so there is always a risk of violence.”

Sitting in two lawn chairs on UT-Austin’s campus, just days after police cracked down on two massive protests at the university, two visiting poets — Naomi Shihab Nye, who is Palestinian-American, and Edward Hirsch, who is Jewish-American — lamented how the divide over the Israel-Hamas war had led to a gulf of silence between students with opposing views on the conflict.

Chants like “From the river to the sea,” are commonplace in pro-Palestinian demonstrations but they can be polarizing and leave little room for understanding and compassion, Hirsch said.

“From the river to the sea” alludes to the stretch of land from the Jordan River on the eastern flank of Israel and the occupied West Bank to the Mediterranean Sea to the west. Pro-Palestinian activists say the chant advocates for peace and equality in the Middle East. But Jewish groups have described it as a call for the eradication of Israel.

Israeli-American poet and author Edward Hirsch poses for a photo on Wednesday, May 1, 2024, in Austin. Credit: Maria Crane/The Texas Tribune

Palestinian-American poet and author Naomi Shihab Nye poses for a photo on Wednesday, May 1, 2024, in Austin. Credit: Maria Crane/The Texas Tribune

“People are not using words more in this moment of catastrophe,” Shihab Nye said. “I haven’t heard any eloquent talks from anyone on either side being exchanged or suggestions of dialogues.”

Shihab Nye said it’s important to highlight the diverse perspectives within the protest movement.

“More needs to be made of Jewish people who are protesting for a ceasefire. I am profoundly grateful for that,” Shihab Nye said.

The conflict has also led some Jewish students to reflect on some of the core values of Judaism.

The highest principle in Judaism is called Pikuach Nefesh, which calls for the protection of life over all other religious considerations. Law said he was raised with this belief and that empathy as Jews doesn’t end with other Jewish people. That’s why he’s continued to protest in support of Palestinians, he said.

Fox also reflected on the same commandment and said he’s horrified at the loss of civilian life on either side of the conflict.

Students with opposing views on the war have acknowledged the value of dialogue during this time, despite how difficult it can be to talk with one another.

Most people Hashem and Kahlenberg spoke to during the Israel Block Party acknowledged the importance of basic human rights, no matter the stance they took on the issue. The pair hopes that more conversations can be had in the future and said this kind of dialogue is vital for peacebuilding on campus and beyond it.

“This is really how you break down the hate on campuses — by meeting the other — and I think many are recognizing that,” Kahlenberg said.

Sneha Dey contributed to this report.

Disclosure: University of Texas at Austin has been a financial supporter of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune's journalism. Find a complete list of them here.


At UT, a hope for peace and understanding amid Israeli-Palestinian conflict. Meet Atidna.

Lily Kepner, Austin American-Statesman
Mon, June 3, 2024 

Elijah Kahlenberg sits on a stone bench by the South Mall at the University of Texas on a warm day in May. Just weeks ago, on April 24, he was on the opposite side of the lawn at a pro-Palestinian protest in which 57 people were arrested after mounted police and officers on bikes and on foot descended on campus.

“At one point, a state trooper on horseback charged the crowd, and I was pushed by that state trooper,” Kahlenberg said. “I ended up spraining my ankle because of that.”

Kahlenberg, a UT Jewish student, said he believes in understanding, and he joined the protest to talk to Arab and Palestinian students, and because he, too, wants UT to divest from weapons manufacturers.

The April 24 protest was organized by the Palestine Solidarity Committee, a registered student group at UT and a chapter of national Students for Justice in Palestine, to call for a cease-fire in Gaza amid the Israel-Hamas war and to demand that UT divest from weapons manufacturers selling arms to Israel. UT System Board of Regents Chairman Kevin Eltife has said that "divestment is not an option."

Kahlenberg said he often finds himself in this position — seeking dialogue with the goal of understanding — even at the seemingly most difficult times. He said the police response to the protest “enraged” him, but it also made his mission more important.

Amid a nationwide climate at universities of escalating tensions over the Mideast conflict, Kahlenberg founded a small but growing student organization, Atidna International, to facilitate open dialogue between Jewish and Arab people, find common ground, understand differences and unite in peace. The group (which is led by Kahlenberg and his best friend, Jadd Hashem, a Palestinian junior at UT) took its name from the Hebrew word for future, “Atid,” and the Arabic suffix for our, “na,” translating to “our future” — Atidna.

Throughout the fall and spring, the American-Statesman spent time with Kahlenberg and Hashem to learn how the group functions at UT — which, like other campuses around the nation, has been roiled by antisemitic and Islamophobic incidents and, most recently, by significant police responses to protests that some say pose a threat to free speech ― and how it perseveres with its mission of peaceful discussion when tensions are highly charged.

Atidna International President Elijah Kahlenberg, left, leads a dialogue with Vice President and Head of Palestinian Dialogue Jadd Hashem during a club meeting at the University of Texas in March. Atidna seeks to facilitate peaceful dialogue and increased understanding between pro-Israeli and pro-Palestinian students.

What is Atidna?

Atidna, founded two years ago by Kahlenberg, is a nonprofit student organization dedicated to allowing Israeli, Palestinian, Jewish and Arab people on campus to come together in dialogue and understanding about the Israeli-Palestinian conflict.

The group was also built from the belief that “Jews and Arabs are cousins, not enemies” and that open discussions can break down tensions and polarization between the two groups. Every month, it holds a dialogue session that lasts an hour and a half on topics from history to the present day to the recent protests on campus.

“It doesn't always mean agreement. It just simply means understanding,” Hashem said about what he thinks is the “missing step” on college campuses.

The organization has recently gained attention from national outlets such as "Good Morning America," Al Jazeera and CNN. Students at 15 universities have reached out to start their own chapters, Kahlenberg said, and there are now established chapters at the University of Pennsylvania, the University of Chicago, Columbia University and Harvard University.

“We had a team that truly believed that Jews and Arabs are a family, and that our aspirations don't inherently conflict,” Kahlenberg said. “And when you can be in a space to hear something like that, hear how similar the ‘other’ is to you, it breaks down a lot of that radicalism and hatred.”
How does Atidna work?

After Hamas, a militant Palestinian group, attacked Israel on Oct. 7, killing 1,200 people and taking more than 200 hostages, and Israel’s military responded by continually bombarding Gaza, where more than 34,000 Palestinians reportedly have been killed, Atidna's two leaders held a vigil for all to come together in mutual mourning on the one-month anniversary of the attack.

Both Kahlenberg and Hashem had distant family members directly affected by the Oct. 7 attack and the ensuing violence in Gaza, they said. Though they've lost some group members since the war began, they have gained even more.

“We recognize that when times get tough like this, it is more important to meet with the other than ever, because you understand that, while you're grieving, they're also grieving,” Kahlenberg said. “When you can grieve together, that is a time for humanity.”

The dialogues Atidna facilitates, they said, allow people to be vulnerable about their beliefs and experiences without fear or argument. That free speech element was really important to cement into the group's mission, Hashem said.

There is no political agenda at the group meetings, but there are rules for who can join. Hashem said those who join are invited to the sessions to ensure an intimate and productive discussion with a variety of viewpoints. These viewpoints can span a wide range but must be grounded in the common value that people deserve the same rights, Hashem said.

“The only political position we take is that we believe that all peoples deserve the same human rights,” Hashem said, adding that this means participants are against occupation and apartheid but are from all backgrounds.

Talking points are written on a blackboard during an Atidna meeting March 19. The student group is built on the belief that “Jews and Arabs are cousins, not enemies” and that open discussions can break down tensions and polarization between the two groups.

Does Atidna's dialogue initiative work?

People have largely been supportive, Kahlenberg said. But that doesn’t mean the work is easy. Outside of Atidna, he said, “it seems like the extremes of both sides are trying to prevent a conversation from even happening.”

“I even had a death threat on Instagram,” he told the Statesman in November, before pro-Palestinian protests on college campuses began springing up. “It’s definitely a real threat. But that's not going to intimidate us.”

For dialogue to work, Hashem said, people have to be willing to listen and be honest, respectful and clear, particularly about how they define words and phrases such as Zionism, intifada and the controversial slogan "From the River to the Sea."

In addition to dialogue sessions, the group has hosted public events, such as sitting at a picnic table between the Israel Block Party and a pro-Palestinian counterprotest in April, engaging passersby in conversation with the sign “One Palestinian, One Jew, Two Brothers. Ask us Anything” — and for three hours, people asked them questions, almost all of them peacefully.

At one point, a person from the Israeli Block Party accused Kahlenberg of being a “traitor,” and when a group began surrounding him, he said, Hashem went to get help from within the block party, fearing it would get physical.

For Hashem, going to the protests doesn’t always feel emotionally safe. Zionists at the counterprotests, he said, can “very much like a personal attack on me.”

But he still attends the demonstrations, and he still engages in conversation.

“The reason that I'm willing to have dialogue is because I want to talk about my family's stories,” Hashem said. “I want to emphasize to as many Israelis as possible why I'm passionate about my beliefs, and I think that their beliefs actually go hand in hand with mine rather than against mine."

Atidna member Josianne Alwardi, a UT international relations major, speaks during a club meeting. Atidna's membership was growing before the April and May protests on college campuses, and the group has seen major interest and growth since those protests.

What impact does Atidna want to have?

Kahlenberg is triple-majoring in government, Middle Eastern studies and Jewish studies at UT, and Hashem is a government major with a minor in Middle Eastern studies. They'd both like to pursue law degrees and continue fostering conversations about Israel and Palestine in their future endeavors.

As for the organization, Kahlenberg said he’d love to see an Atidna chapter at every university. He said he'd encourage people, even off campuses, to consider engaging in conversations, taking the first uncomfortable step to bridge the gap and find similarities.

Earlier this year, Kahlenberg won the Truman Scholarship — a $30,000 federally funded grant that earned him a feature on UT news celebrating Atidna and a meeting with UT President Jay Hartzell that was captured in a video posted on X. The announcement happened just 12 days before the April 24 pro-Palestinian protest, which, due to the police response, prompted calls for Hartzell’s resignation.

Kahlenberg said he is not calling for Hartzell to resign, but he pushes back against the police response to the protest. If he were to see Hartzell again, Kahlenberg said, he’d open a conversation about it.

“I would say what happened on three Wednesdays ago was completely horrific. The suppression of students' rights was horrific,” Kahlenberg told the Statesman in May. “I respect you as an individual, the many amazing accomplishments you have provided for UT, but you have an obligation to protect your students.”

Hartzell has publicly supported Atidna and Kahlenberg's work.

"It’s great for the University. It’s great for the world," he said in a UT news release referring to Kahlenberg's prestigious award and Atidna's work. “It’s a time when that work is needed. When we say what starts here changes the world, we take it seriously.”

Hashem said he’d like to see UT partner with Atidna, especially because of the group's emphasis on free speech. He said he and Kahlenberg “believe that peace and liberation come hand in hand,” and that dialogue is the start to it.

"No one wants to see this war continue; we want to see people's lives being preserved and both people being able to fulfill their aspirations and our mutual homeland," Hashem said. "Through conversations like that, a world of hate is broken down. We see how similar we are at the end of the day.

“More people are waking up to the vision that we have of just understanding one another."

This article originally appeared on Austin American-Statesman: Atidna at UT operates from belief that Jews and Arabs are not enemies