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Will China’s zero-Covid policy bring the world’s factory grinding to a halt? | China

A top Huawei executive has broken ranks to warn that China’s stringent zero-Covid policy may trigger “massive losses” for the tech industry, putting the country’s economy as well as the global supply chain at greater risk.

“If Shanghai cannot resume production by May, all of the tech and industrial players who have supply chains in the area will come to a complete halt, especially the automotive industry,” Richard Yu Chengdong, head of Huawei’s consumer and auto division said in a WeChat post. “That will pose severe consequences and massive losses for the whole industry.”

The comments from Huawei, a bastion of China’s tech industry, underline growing tensions as the country attempts to eliminate Covid by locking down Shanghai. As lockdown continues in the key financial hub and home to the world’s largest container port, economists have warned of heavy costs to both Asia’s biggest economy and the global supply chain.

Richard Yu Chengdong at the Huawei Developer Conference 2020.
Richard Yu Chengdong at the Huawei Developer Conference 2020. Photograph: VCG/Getty Images

In recent days, Beijing has repeatedly reaffirmed its plan to handle Covid, which has been under heavy scrutiny as case numbers continue to rise in Shanghai despite a severe lockdown. In a news bulletin on state TV on Wednesday, President Xi Jinping urged his officials not to relax the pandemic control work.

“Persistence is victory. Adhere to people above all else, life above all else … dynamic zero-Covid, grasp the details of the epidemic prevention and control initiatives,” Xi said, adding that “it is necessary to overcome paralysing thoughts, war weariness, fluke mentality and slack mentality”.

But economists warned that the ongoing lockdown in Shanghai – if it persists for this month alone – will cost China’s most populous city and a key financial hub a 6% loss of GDP, which translates to 2% loss of GDP for the whole of the nation.

This would, in turn, drag down by nearly 1% of China’s economic growth aim to 4.6%, according to Iris Pang, chief economist for greater China at the Dutch bank ING. The premier, Li Keqiang, last month set China’s annual growth target at “about 5.5%”.

Last month, researchers at the Chinese University of Hong Kong said China’s lockdowns were likely to cost at least £35bn a month, or 3.1% of GDP in lost economic output. The authors also estimated that imposing full-scale lockdown on a major city such as Beijing or Shanghai would reduce the national real GDP by 4%, of which 7% is contributed by the spillover effects.

Alicia García-Herrero, Hong Kong-based chief economist for Asia Pacific at Natixis, said that 40% of China’s GDP was already “in some form of lockdown”. “GPS data shows that China is already halfway to the mobility lost during the first Covid outbreak in Hubei province in 2020. As of 12 April, monthly mobility in China fell by 29% versus 2019, with 24 provinces seeing a decline.”

In February 2020, the reduction in mobility was 66%, collapsing in 29 provinces, García-Herrero said. “The situation is particularly alarming for manufacturers in Shanghai, Jiangsu and Jilin – the key hubs for cars, electronics and semiconductors.”

“We predict that for every month of lockdown in China, there’ll be 0.5% of reduction in China’s annual GDP,” she warned. “Beijing claims it wants economic growth, but it’s all about its priority after all – either to stamp out the virus or to allow the economy to grow. You cannot have both.”

The lockdown has huge ramifications for the global economy, adding to strong inflationary pressures by choking off the supply of goods. Reports this week said almost 500 bulk cargo ships were moored off Shanghai, as the port struggles to handle them.

2022 is a crucial year for the ruling communist party. President Xi is expected to extend his rule during the 20th party congress later this year. ING anticipates that local governments as well as the central government in Beijing will top up their relief measures, increase fiscal support and ease monetary policy to help economic growth. The bank has revised China’s GDP growth rate down to 4% year-on-year from 5% for the second quarter of this year.

The spillover effect of China’s lockdown is also being felt in other parts of the global supply chain. Since Chinese cities such as Shanghai and Jilin entered lockdowns, shares of the car and semiconductor producers have been hit hard. “This will have an impact on consumers elsewhere,” said García-Herrero.

This week, Pegatron, a key iPhone maker, halted its operations at two subsidiaries in Shanghai and nearby Kunshan. The Taiwanese firm said it “actively cooperates with local authorities” and would try to resume operations as soon as possible. It followed the practice of Foxconn, another major supplier, which halted operations in the Chinese tech hub of Shenzhen in the southern Guangdong province in early March but later resumed “fundamental operations” later that month.

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The woes in Shanghai have added another level of uncertainty into an industry that has been under pressure since the start of the Covid pandemic. “The global supply chain is so finely tuned that any disruption at a major trading hub such as Shanghai will have a major impact across the world,” said Stephen Carr, commercial director at Peel Ports, one of the UK’s biggest port operators.

“Whilst we are not currently seeing any direct impact at our ports, we are already handling enquiries from companies who are looking to use the port of Liverpool as an alternative to traditional southern ports in order to avoid any potential congestions further down the line.”

The port shortages and disruption leave businesses facing a worrying scenario: running out of goods.

“If the government extends lockdowns, the risk of supply chain disruptions will increase, and firms may use up their inventories… [If] Guangdong, which contributes 13% and 15% of car and chip production in China, also moves into lockdown, the supply shock will only worsen,” García Herrero said.

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Culture

Top 10 Florida Cities Dominate The Business Startup Landscape In The U.S.

Top 10 Florida Cities And Business Startup Landscape In The U.S.

The Voice Of EU | Florida emerges as a hub for entrepreneurial endeavors, with its vibrant business landscape and conducive environment for startups. Renowned for its low corporate tax rates and a high concentration of investors, the Sunshine State beckons aspiring entrepreneurs seeking fertile grounds to launch and grow their businesses.

In a recent report by WalletHub, Florida cities dominate the list of the top 10 best destinations for business startups, showcasing their resilience and economic vitality amidst challenging times.

From Orlando’s thriving market to Miami’s dynamic ecosystem, each city offers unique advantages and opportunities for entrepreneurial success. Let’s delve into the chronologically listed cities that exemplify Florida’s prominence in the business startup arena.

1. Orlando Leads the Way: Orlando emerges as the most attractive market in the U.S. for business startups, with a remarkable surge in small business establishments. WalletHub’s latest report highlights Orlando’s robust ecosystem, fostering the survival and growth of startups, buoyed by a high concentration of investors per capita.

2. Tampa Takes Second Place: Securing the second spot among large cities for business startups, Tampa boasts a favorable business environment attributed to its low corporate tax rates. The city’s ample investor presence further fortifies startups, providing essential resources for navigating the initial years of business operations.

3. Charlotte’s Diverse Industries: Claiming the third position, Charlotte stands out for its diverse industrial landscape and exceptionally low corporate taxes, enticing companies to reinvest capital. This conducive environment propels entrepreneurial endeavors, contributing to sustained economic growth.

4. Jacksonville’s Rising Profile: Jacksonville emerges as a promising destination for startups, bolstered by its favorable business climate. The city’s strategic positioning fosters entrepreneurial ventures, attracting aspiring business owners seeking growth opportunities.

5. Miami’s Entrepreneurial Hub: Miami solidifies its position as a thriving entrepreneurial hub, attracting businesses with its dynamic ecosystem and strategic location. The city’s vibrant startup culture and supportive infrastructure make it an appealing destination for ventures of all sizes.

6. Atlanta’s Economic Momentum: Atlanta’s ascent in the business startup landscape underscores its economic momentum and favorable business conditions. The city’s strategic advantages and conducive policies provide a fertile ground for entrepreneurial ventures to flourish.

7. Fort Worth’s Business-Friendly Environment: Fort Worth emerges as a prime destination for startups, offering a business-friendly environment characterized by low corporate taxes. The city’s supportive ecosystem and strategic initiatives facilitate the growth and success of new ventures.

8. Austin’s Innovation Hub: Austin cements its status as an innovation hub, attracting startups with its vibrant entrepreneurial community and progressive policies. The city’s robust infrastructure and access to capital foster a conducive environment for business growth and innovation.

9. Durham’s Emerging Entrepreneurship Scene: Durham’s burgeoning entrepreneurship scene positions it as a promising destination for startups, fueled by its supportive ecosystem and strategic initiatives. The city’s collaborative culture and access to resources contribute to the success of new ventures.

10. St. Petersburg’s Thriving Business Community: St. Petersburg rounds off the top 10 with its thriving business community and supportive ecosystem for startups. The city’s strategic advantages and favorable business climate make it an attractive destination for entrepreneurial endeavors.

Despite unprecedented challenges posed by the COVID-19 pandemic, the Great Resignation, and high inflation, these top Florida cities remain resilient and well-equipped to overcome obstacles, offering promising opportunities for business owners and entrepreneurs alike.


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European Startup Ecosystems Awash With Gulf Investment – Here Are Some Of The Top Investors

European Startup Ecosystem Getting Flooded With Gulf Investments

The Voice Of EU | In recent years, European entrepreneurs seeking capital infusion have widened their horizons beyond the traditional American investors, increasingly turning their gaze towards the lucrative investment landscape of the Gulf region. With substantial capital reservoirs nestled within sovereign wealth funds and corporate venture capital entities, Gulf nations have emerged as compelling investors for European startups and scaleups.

According to comprehensive data from Dealroom, the influx of investment from Gulf countries into European startups soared to a staggering $3 billion in 2023, marking a remarkable 5x surge from the $627 million recorded in 2018.

This substantial injection of capital, accounting for approximately 5% of the total funding raised in the region, underscores the growing prominence of Gulf investors in European markets.

Particularly noteworthy is the significant support extended to growth-stage companies, with over two-thirds of Gulf investments in 2023 being directed towards funding rounds exceeding $100 million. This influx of capital provides a welcome boost to European companies grappling with the challenge of securing well-capitalized investors locally.

Delving deeper into the landscape, Sifted has identified the most active Gulf investors in European startups over the past two years.

Leading the pack is Aramco Ventures, headquartered in Dhahran, Saudi Arabia. Bolstered by a substantial commitment, Aramco Ventures boasts a $1.5 billion sustainability fund, alongside an additional $4 billion allocated to its venture capital arm, positioning it as a formidable player with a total investment capacity of $7 billion by 2027. With a notable presence in 17 funding rounds, Aramco Ventures has strategically invested in ventures such as Carbon Clean Solutions and ANYbotics, aligning with its focus on businesses that offer strategic value.

Following closely is Mubadala Capital, headquartered in Abu Dhabi, UAE, with an impressive tally of 13 investments in European startups over the past two years. Backed by the sovereign wealth fund Mubadala Investment Company, Mubadala Capital’s diverse investment portfolio spans private equity, venture capital, and alternative solutions. Notable investments include Klarna, TIER, and Juni, reflecting its global investment strategy across various sectors.

Ventura Capital, based in Dubai, UAE, secured its position as a key player with nine investments in European startups. With a presence in Dubai, London, and Tokyo, Ventura Capital boasts an international network of limited partners and a sector-agnostic investment approach, contributing to its noteworthy investments in companies such as Coursera and Spotify.

Qatar Investment Authority, headquartered in Doha, Qatar, has made significant inroads into the European startup ecosystem with six notable investments. As the sovereign wealth fund of Qatar, QIA’s diversified portfolio spans private and public equity, infrastructure, and real estate, with strategic investments in tech startups across healthcare, consumer, and industrial sectors.

MetaVision Dubai, a newcomer to the scene, has swiftly garnered attention with six investments in European startups. Focusing on seed to Series A startups in the metaverse and Web3 space, MetaVision raised an undisclosed fund in 2022, affirming its commitment to emerging technologies and innovative ventures.

Investcorp, headquartered in Manama, Bahrain, has solidified its presence with six investments in European startups. With a focus on mid-sized B2B businesses, Investcorp’s diverse investment strategies encompass private equity, real estate, infrastructure, and credit management, contributing to its notable investments in companies such as Terra Quantum and TruKKer.

Chimera Capital, based in Abu Dhabi, UAE, rounds off the list with four strategic investments in European startups. As part of a prominent business conglomerate, Chimera Capital leverages its global reach and sector-agnostic approach to drive investments in ventures such as CMR Surgical and Neat Burger.

In conclusion, the burgeoning influx of capital from Gulf investors into European startups underscores the region’s growing appeal as a vibrant hub for innovation and entrepreneurship. With key players such as Aramco Ventures, Mubadala Capital, and Ventura Capital leading the charge, European startups are poised to benefit from the strategic investments and partnerships forged with Gulf investors, propelling them towards sustained growth and success in the global market landscape.


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China Reveals Lunar Mission: Sending ‘Taikonauts’ To The Moon From 2030 Onwards

China Reveals Lunar Mission

The Voice Of EU | In a bold stride towards lunar exploration, the Chinese Space Agency has unveiled its ambitious plans for a moon landing set to unfold in the 2030s. While exact timelines remain uncertain, this endeavor signals a potential resurgence of the historic space race reminiscent of the 1960s rivalry between the United States and the USSR.

China’s recent strides in lunar exploration include the deployment of three devices on the moon’s surface, coupled with the successful launch of the Queqiao-2 satellite. This satellite serves as a crucial communication link, bolstering connectivity between Earth and forthcoming missions to the moon’s far side and south pole.

Unlike the secretive approach of the Soviet Union in the past, China’s strategy leans towards transparency, albeit with a hint of mystery surrounding the finer details. Recent revelations showcase the naming and models of lunar spacecraft, steeped in cultural significance. The Mengzhou, translating to “dream ship,” will ferry three astronauts to and from the moon, while the Lanyue, meaning “embrace the moon,” will descend to the lunar surface.

Drawing inspiration from both Russian and American precedents, China’s lunar endeavor presents a novel approach. Unlike its predecessors, China will employ separate launches for the manned module and lunar lander due to the absence of colossal space shuttles. This modular approach bears semblance to SpaceX’s Falcon Heavy, reflecting a contemporary adaptation of past achievements.

Upon reaching lunar orbit, astronauts, known as “taikonauts” in Chinese, will rendezvous with the lunar lander, reminiscent of the Apollo program’s maneuvers. However, distinct engineering choices mark China’s departure from traditional lunar landing methods.

The Chinese lunar lander, while reminiscent of the Apollo Lunar Module, introduces novel features such as a single set of engines and potential reusability and advance technology. Unlike past missions where lunar modules were discarded, China’s design hints at the possibility of refueling and reuse, opening avenues for sustained lunar exploration.

China Reveals Lunar Mission: Sending 'Taikonauts' To The Moon From 2030 Onwards
A re-creation of the two Chinese spacecraft that will put ‘taikonauts’ on the moon.CSM

Despite these advancements, experts have flagged potential weaknesses, particularly regarding engine protection during landing. Nevertheless, China’s lunar aspirations remain steadfast, with plans for extensive testing and site selection underway.

Beyond planting flags and collecting rocks, China envisions establishing a permanent lunar base, the International Lunar Research Station (ILRS), ushering in a new era of international collaboration in space exploration.

While the Artemis agreements spearheaded by NASA have garnered global support, China’s lunar ambitions stand as a formidable contender in shaping the future of space exploration. In conclusion, China’s unveiling of its lunar ambitions not only marks a significant milestone in space exploration but also sets the stage for a new chapter in the ongoing saga of humanity’s quest for the cosmos. As nations vie for supremacy in space, collaboration and innovation emerge as the cornerstones of future lunar endeavors.


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