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Chinese smartphone shipments to Russia plunge as rouble collapses

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Chinese smartphone shipments to Russia plunge as rouble collapses

China’s largest smartphone makers are slashing their shipments to Russia due to the rouble’s collapse and western sanctions regardless of stress from Beijing to help Vladimir Putin after his invasion of Ukraine.

The cutbacks, led by Huawei and Xiaomi, present that efforts by China’s president Xi Jinping and his counterpart Putin to construct an in depth private relationship will not be shielding Chinese language teams from the financial fallout of the warfare. The sanctions are additionally making it troublesome for Chinese language firms to use alternatives created by an exodus of western teams from Russia.

Shipments from main Chinese language smartphone producers Xiaomi, Oppo and Huawei have fallen by no less than half for the reason that outbreak of the warfare, individuals accustomed to the matter stated. Chinese language manufacturers comprise about 60 per cent of the Russian smartphone market. Xiaomi and Huawei didn’t remark. Oppo was not instantly obtainable for remark.

“It’s politically delicate to overtly announce a gross sales suspension within the Russian market like Apple and Samsung,” stated one former Xiaomi govt, referring to Beijing’s help for Moscow. “However from a enterprise perspective, it makes [sense] to face by and watch what occurs subsequent.”

In an indication of additional fallout from the warfare for Huawei, two British administrators of its UK enterprise resigned from the board on Wednesday. Huawei confirmed the transfer by Andrew Cahn and Ken Olisa amid reviews that the pair give up as a result of the Chinese language telecoms big has did not publicly criticise the Russian invasion.

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Chinese language factories making the whole lot from smartphones to air conditioners have counted on Russia in recent times for his or her abroad development, gaining a powerful foothold within the nation of 140m individuals. Bilateral commerce hit a document excessive of $146bn final yr with China accounting for about 14 per cent of Russian imports, together with virtually all digital items.

Inside days of Russia’s assault on Ukraine, western firms pledged to chop ties with Moscow — amongst them BP, Apple, Nike and Netflix — to keep away from reprisals stemming from any affiliation with the Kremlin.

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However the greater than 35 per cent plunge within the rouble in opposition to the greenback for the reason that invasion has additionally made it troublesome for Chinese language firms to promote their merchandise in Russia with out incurring a loss. They should cost Russian prospects a a lot larger worth in roubles to make up for the trade fee, but that’s troublesome given the deteriorating economic system.

“You might want to set a brand new worth day by day with a purpose to keep away from making losses,” stated Ivan Lam, a Hong Kong-based analyst at Counterpoint Analysis, a consultancy.

Lam added that many Russian smartphone distributors have stopped inserting new orders with Chinese language producers due to the trade fee dangers.

“It is extremely dangerous to function in Russia proper now,” stated one former Huawei govt who has labored in Moscow.

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In line with specialists, the danger of secondary sanctions being imposed on China was additionally anticipated to develop because the warfare dragged on if the US believed Beijing was considerably undermining efforts to punish Russia.

Beijing was considering “very critically in regards to the potential prices of embroilment in Russia’s confrontation” regardless of “contemplating most restrictions imposed by the US and its allies as illegitimate”, stated Andrew Gilholm, the top of China evaluation at Management Dangers, a consultancy.

The previous Xiaomi govt stated the nation’s know-how business anticipated the impression of US-led sanctions on Russia to in the end be as extreme — if no more so — as US actions in opposition to Iran.

“Plenty of US-made items, together with even small components, might be banned from being shipped to Russia whereas a violation of the principles could result in one other Meng Wanzhou incident,” stated the chief, referring to the Huawei chief monetary officer who was detained in Canada on allegations she misled banks into breaching sanctions in opposition to Iran.

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Zhan Kai, a Shanghai-based lawyer at East & Harmony Companions who has suggested Chinese language firms on their Russia operations, stated he had obtained an inflow of inquiries on the brand new sanctions.

“The Russia-related sanctions are nonetheless not very clear and lots depends upon enforcement, on which the US authorities has a variety of leeway,” he stated.

The Huawei UK resignations additionally spotlight the excessive reputational stakes for Chinese language firms from Beijing’s failure to sentence Putin’s warfare. Regardless of robust worldwide opposition to the warfare, Beijing has refused to sentence Putin for the invasion. As a substitute China has pledged “regular” enterprise and commerce ties with Russia. Chinese language manufacturers haven’t left Russia en masse.

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Félix Boudreault, managing director of Sustainable Market Methods, an ESG funding analysis group, warned that asset managers would possibly more and more apply “geographical divestment standards” to investments in China and Russia, like they’ve completed for fossil fuels and weapons firms.

Nice Wall Motor and Geely, two of China’s largest carmakers, stated that they had no plans to instantly droop their operations in Russia, a sign that some Chinese language teams retained long-term ambitions available in the market regardless of the toughening enterprise situations.

“The overseas manufacturers go away this vacuum however the Russian shoppers are most likely in no form to purchase the Chinese language items that can fill that vacuum,” stated Tu Le, managing director of Sino Auto Insights.

Policymakers are assessing how China-Russian commerce might be financed, after the west imposed sanctions on Russia’s central financial institution and reduce Russia from the Swift worldwide funds system. Whereas Beijing has for years touted Cips, a renminbi-based cost system, as a substitute for dollar-powered Swift, progress has been gradual.

A number of Chinese language firms have reported elevated use of renminbi funds by their Russian purchasers however complain of issues.

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“It takes no less than two weeks to open a renminbi account on the Financial institution of China Moscow department due to a surge in demand,” stated John Jin, abroad gross sales supervisor at a Huizhou-based toy firm with Russian purchasers.

An govt at Wuhan Zoncare Bio-medical Electronics Co, a medical gear maker, stated many Russian purchasers have cancelled their orders because the Swift ban made it troublesome for them to make greenback or euro funds. Most Russian banks didn’t present renminbi funds or didn’t have sufficient Chinese language foreign money in hand.

“We consider the Russian market bears a variety of potential and the nation will want Chinese language merchandise greater than ever after the warfare,” stated the chief. “However for now, we are going to anticipate higher timing to enter the nation.”

Extra reporting by Emma Zhou and Maiqi Ding in Beijing

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Anti-Islam Saudi immigrant held over Magdeburg attack

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Anti-Islam Saudi immigrant held over Magdeburg attack

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The man who allegedly drove into a crowd of people at a Christmas market in the east German city of Magdeburg on Friday evening, killing four people, is a 50-year-old doctor from Saudi Arabia who came to Germany in 2006, according to authorities.

Reiner Haseloff, prime minister of the eastern state of Saxony-Anhalt, said the alleged perpetrator, Taleb al-Abdulmohsen, was not known to the police as an Islamist.

Al-Abdulmohsen’s profile on social media site X indicates that he is a fierce critic of Islam.

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German media reported that he is an activist who helped opponents of the regime in Saudi Arabia to flee the country and apply for asylum in Europe.

Abdulmohsen allegedly drove his black BMW X5 into the Christmas market in central Magdeburg shortly after 7pm on Friday evening, knocking over dozens of people before being arrested by police.

A video on social media showed officers surrounding him at a tram stop. He was seen lying on the ground next to his vehicle, a rented car with Munich number-plates, and later being led away for questioning.

Authorities in Saxony-Anhalt said four people died in the attack and more than 200 people were injured, 41 severely. Chancellor Olaf Scholz visited the scene of the attack on Saturday.

“This is a catastrophe for the city of Magdeburg and for the region and generally for Germany,” said Haseloff.

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Since the incident, a number of interviews with the alleged perpetrator have resurfaced, including one in the Frankfurter Allgemeine Zeitung from 2019 in which he described himself as “the most aggressive critic of Islam in history”.

He has also expressed admiration for Alternative for Germany (AfD), a far-right, anti-immigration party which is polling second behind the centre-right CDU/CSU bloc ahead of Germany’s national elections in February, and accused Germany of not doing enough to fight Islamism.

“After 25 years in this business, you think nothing could surprise you any more,” wrote Peter Neumann, an expert in terrorism at King’s College, London, on X. “But a 50-year-old Saudi ex-Muslim who lives in East Germany, loves the AfD and wants to punish Germany for its tolerance towards Islamists — that really wasn’t on my radar.”

The incident comes almost eight years to the day since 12 people were killed and 49 injured in 2016 on Berlin’s Breitscheidplatz when an Islamic State terrorist ploughed a truck into a Christmas market.

Much remains unclear about al-Abdulmohsen and his possible motivation.

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According to German media reports, the alleged attacker was born in the Saudi city of Hofuf and came to Germany in March 2006 to study. In July 2016 he was given refugee status after claiming he had received death threats for turning away from Islam. 

Authorities said he worked as a psychiatrist and psychotherapist in Bernburg, a town of 32,000 between Halle and Magdeburg.

Spiegel Online reported that he was an activist who helped people — women in particular — to flee Saudi Arabia and ran an Internet site providing information about the German asylum system. In 2019 he gave interviews about his activities to two German newspapers in which he expressed his hatred for Islam.

In one, he said he had “broken away” from the religion in 1997.

“I found life in Saudi Arabia an ordeal, you have to pretend you’re a Muslim and follow all the rituals,” he said. “I knew I could no longer live in fear and when I realised that even anonymous activism would put my life in danger as a Saudi ex-Muslim, I applied for asylum.”

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In the other, he said he had written posts criticising Islam in an internet forum run by the jailed activist Raif Badawi and subsequently received threats to his life.

“They wanted to “slaughter” me if I ever returned to Saudi Arabia,” he said. “It wouldn’t have made any sense to expose myself to the risk of having to return and then be killed.”

In recent months, he appeared to have moved away from activism and adopted a highly critical attitude to the German authorities that fed off conspiracy theories more often associated with the nationalist right.

In a post on X in November setting out the “demands of the Saudi liberal opposition” he called on Germany to “protect its borders against illegal immigration”. 

“It has become evident that Germany’s open borders policy was [former chancellor Angela] Merkel’s plan to Islamise Europe,” he wrote. He also demanded Germany repeal sections of its penal code that he claims “limit . . . free speech” by “making it an offense [sic] to insult or belittle religious doctrines or practices”.

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His X profile features a machine gun and claims “Germany chases female Saudi asylum seekers, inside and outside Germany, to destroy their lives”.

Earlier this month he was interviewed by an anti-Islam blog and accused the German authorities of carrying out a covert operation to hunt down Saudi ex-Muslims while granting asylum to Syrian jihadis.

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Congress avoids a shutdown but leaves 'a big mess' for Trump and Republicans in 2025

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Congress avoids a shutdown but leaves 'a big mess' for Trump and Republicans in 2025

WASHINGTON — Congress struck an 11th-hour deal to avert a government shutdown during the holidays, but in the process, it lengthened an already extensive to-do list for the first year of President-elect Donald Trump’s return to office.

The funding bill keeps the government open until March 14. Even though Republicans will control the White House, the House and the Senate, they’ll again need Democratic votes to stop a shutdown in less than three months.

In addition, Trump’s demand that Congress extend or abolish the debt ceiling to take it off his plate next year failed dramatically. On Wednesday, he threatened electoral primary challenges against “any Republican” who voted to fund the government without dealing with the debt limit. On Friday, 170 House Republicans defied him and did just that.

The turmoil of the week previews the legislative chaos that awaits Washington in the second Trump administration when the incoming president faces a wide range of major deadlines and ambitions.

Sen. Ron Johnson, R-Wis., said Republicans made a mistake by punting funding to March 14, and instead should have approved a stopgap bill through the end of next September to clear their plate for Trump’s agenda.

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“I think it’s kind of stupid,” he said of the new deadline. “Don’t ask me to explain or defend this dysfunction.”

Rep. Andy Barr, R-Ky., said late Friday that the “lesson” of the last few days is: “Unity is our strength. Disunity is the enemy of the conservative cause.”

He advised Trump and his team to avoid such a situation in the future by presenting legislative demands “early” so the GOP can “air out whatever differences there are” well before a deadline.

“The House needs to over-communicate within our various factions,” Barr said. “The House needs to over-communicate with [incoming Senate] Majority Leader [John] Thune, and House and the Senate both need to over-communicate with the administration.”

In the last four days, the communication was particularly poor. A day after Speaker Mike Johnson released an initial bipartisan deal, Trump and his billionaire confidant Elon Musk blew it up. The speaker went through three additional iterations of his plan to prevent a shutdown, ultimately succeeding after nixing Trump’s most consequential — and last-minute — demand.

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“I’m concerned,” said Sen. Gary Peters, D-Mich., who faces re-election in 2026. “Obviously, we’ve seen this kind of chaos for the last two years. So I would fully expect we’ll see that continue in the next two years and probably get even worse.”

On Thursday night, Rep. Derrick Van Orden, R-Wis., downplayed what he called a “disjointed process,” saying it’s a natural way for House Republicans and Trump’s team to understand “how to communicate with each other.”

“It’s going to be awesome. You know why it’s going to be awesome? Because now we know how to work together,” Van Orden said just before Speaker Johnson’s Plan B went down in flames in the House.

Van Orden’s fellow Wisconsinite, Sen. Johnson, was less bullish about smoothly plowing through the early part of the 2025 agenda.

“We got a big mess on our hands, no doubt about it,” Johnson said. “That’s why I’m trying to underpromise and hopefully over-deliver.”

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In addition to another government funding deadline and a debt limit that must be addressed by mid-2025 to avert a calamitous default, Trump and Republicans need to confirm his personnel through the Senate, and they want to pass major party-line bills to beef up immigration enforcement and extend his expiring 2017 tax law.

“It’s not going to be boring,” Sen. Ted Cruz, R-Texas, deadpanned when asked about the tasks facing Congress next year.

There’s also the question of Musk’s role after his part in scuttling the original bipartisan funding deal raised hackles across Capitol Hill.

“A lot of people on both sides of the aisle are deeply disturbed by a billionaire threatening people if they don’t vote the right way,” Rep. Debbie Dingell, D-Mich., said.

The tumult of the last week “foretells something very ominous about next year,” Rep. Gerry Connolly, D-Va., said after the House vote, noting that the Republican majority in the lower chamber will be even smaller next year.

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“I think we’re in for a lot of turbulence on the Republican side of the House because of the instability and chaos and disruption that Trump embraces,” Connolly said.

He also wondered whether Republicans will be able to elect a speaker on Jan. 3 with a wafer-thin majority; it took 15 rounds of voting to elect a speaker at the beginning of the last Congress and some hard-right Republicans are wobbly on Speaker Johnson after his handling of the shutdown threat this week.

“So I leave very unsettled tonight in terms of what we just experienced,” Connolly said before the House adjourned for the holidays. “I think it’s very ominous, and it is portentous.”

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US House votes through last-gasp bill to keep government open

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US House votes through last-gasp bill to keep government open

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The US House passed a stop-gap funding measure with just hours to spare on Friday, paving the way for Congress to avert a government shutdown after days of fighting on Capitol Hill.

The bill that passed the House did not include any change to the debt ceiling, defying Donald Trump’s call for the mechanism to be scrapped or increased.

But the measure gained bipartisan support in the chamber, with Democrats joining Republicans to pass the bill 366-34 just after 6pm in Washington — six hours before the deadline.

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The Democratic controlled Senate must now vote on the law before it heads to the desk of President Joe Biden, who will support the legislation, according to the White House press secretary.

Enacting the bill will end a week of volatility in Washington as Trump and his ally Elon Musk flexed their influence over hardline Republicans, pushing them to reject what they said were “giveaways” to Democrats.

Before the bill passed on Friday, Musk expressed his continued disdain for the bill: “So is this a Republican bill or a Democrat bill?”

The measure passed was House Speaker Mike Johnson’s third attempt to get a deal through the chamber after Trump torpedoed the first bipartisan agreement earlier in the week.

The new bill was almost identical to Johnson’s second one, but stripped out any move to raise or suspend the debt ceiling, despite Trump’s demands. It extends government funding at current levels, and provides aid for natural disaster relief and farmers.

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Johnson said after the bill passed that he had been in “constant contact” with Trump and spoken to Musk shortly before the vote and received their blessing.

Trump “knew exactly what we were doing and why and, and this is a good outcome for the country. I think he certainly is happy about this outcome as well”, he told reporters on Capitol Hill.

Johnson said he asked Musk: “‘Hey, you want to be Speaker of the House?’ . . . He said, ‘this may be the hardest job in the world’. It is.”

The passage in the House marked a victory for Johnson, who had vowed earlier in the day that the US would “not have a government shut down”.

A shutdown would temporarily close parts of the government and suspend pay for federal employees. Previous government shutdowns have forced hundreds of thousands of federal workers to be furloughed.

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Democrats also claimed victory, with House minority leader Hakeem Jeffries saying his party “stopped extreme Maga Republicans from shutting down the government”.

He added: “House Democrats have successfully stopped the billionaire boys club, which wanted a $4tn blank cheque by suspending the debt ceiling.”

Trump’s looming presence over the debate has been the biggest complicating factor in frantic negotiations to find a last-minute deal.

But as soon as the vote began, Musk changed his tune, saying that Johnson “did a good job here, given the circumstances. It went from a bill that weighed pounds to a bill that weighed ounces. Ball should now be in the Dem court.”

Democrats, angry that the earlier bipartisan deal was ditched, have blamed Musk for inserting himself in the process this week, triggering more turmoil in Congress just ahead of the US holiday season.

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“At the behest of the world’s richest man who no one voted for, the US Congress has been thrown into pandemonium,” said Democrat Rosa DeLauro about Musk on Thursday.

Some top Republicans also appeared to criticise the interventions by Trump and Musk.

“I don’t care to count how many times I’ve reminded . . . our House counterparts how harmful it is to shut the government down and how foolish it is to bet your own side won’t take the blame for it,” Mitch McConnell, the outgoing Senate Republican leader, said on Friday.

“That said, if I took it personally every time my advice went unheeded, I probably wouldn’t have spent as long as I have in this particular job.”

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