Defense, chip sectors newly represented while tech giants notably absent
Supersonic reconnaissance drones are seen at a military parade in Beijing in October 2019. Representatives of Chinese defense contractors targeted by U.S. sanctions are among those serving as delegates to the National People's Congress and the advisory Chinese People's Political Consultative Conference. © Reuters
BEIJING -- Companies targeted by U.S. sanctions are featuring prominently at the annual meeting of China's parliament that started here Sunday, underscoring Beijing's push for independent semiconductor and commodity supply chains.
The "Two Sessions" of the National People's Congress and the advisory Chinese People's Political Consultative Conference bring together a total of about 5,150 delegates. This year, around 100 are executives or representatives from enterprises targeted by Washington or related businesses, according to a review of company social media posts and Chinese media reports.
As usual, the makeup of the two bodies has undergone a reshuffle since the twice-a-decade Communist Party congress, which was held last autumn. Though China's constitution describes the NPC as the "highest state organ of power," it falls essentially under the party's control. While delegates have no real authority in their roles, being chosen is a sign of close ties to party leadership.
A number of representatives hail from state-owned military-industrial companies, including: arms manufacturer China North Industries Group (Norinco); China Aerospace Science and Technology Corp.; and China Electronics Technology Group Corp., which handles IT services for the military, among other clients.
Those companies, all of which have been targeted by U.S. sanctions, are considered key to the government's military-civil fusion policy on technology development. Tapping their leadership for parliamentary delegates is likely part of a push to accelerate the whole-of-country effort to make China a technological superpower.
Artificial intelligence and semiconductor companies targeted by Washington are also well represented at the political meetings.
The founder of AI chip developer Cambricon Technologies is participating for the first time, while Semiconductor Manufacturing International Corp. -- China's top contract chipmaker -- is also represented.
Chen Tianshi, founder and CEO of Cambricon Technologies, left, holds a cloud artificial intelligence chip during a launch ceremony in Shanghai, in May 2018. Chen has been chosen as a delegate to China's "Two Sessions" for the first time this year. © Reuters
Attendees also include the founders of face recognition giant SenseTime and voice recognition company iFlytek -- both on Washington's export blacklist.
This year's roster covers a number of chipmakers and related companies not directly targeted by sanctions, such as Hua Hong Semiconductor, China's second-largest foundry, and materials manufacturers like Xuzhou B&C Chemical and GRINM Semiconductor Materials.
Semiconductors are a focal point of the government's Made in China 2025 initiative it announced in 2015, yet China still supplies only around 20% to 30% of its own chips. As U.S. sanctions squeeze the industry, the companies represented at the political meetings are being positioned to lay the foundation for growth that does not require American technology.
In particular, Beijing is ramping up development of its AI industry. The government employed AI-powered face and voice recognition software in its implementation of zero-COVID measures.
This year's Two Sessions also reflects the importance of resources to Beijing as it seeks to make its supply chains more resilient against sanctions. The People's Political Consultative Conference now features a new sector devoted to the environment and natural resources.
The head of China Rare Earth Group -- the state-owned rare earths giant created from a 2021 merger -- and a researcher in the field have been selected as delegates to the sessions, along with the leader of Baotou Steel, which also works with rare earths.
Also represented is China Minmetals, which has been pursuing resource-related acquisitions overseas.
Notably absent from the delegate rolls are top players in the internet sector, including Tencent Holdings founder Pony Ma, Baidu CEO Robin Li, NetEase CEO William Ding and Lenovo Group CEO Yang Yuanqing.
Internet companies had been a major driver of economic growth, affording political clout to big names like Ma and Li. But Beijing began cracking down on the industry in fall 2020, following rare apparent criticism of the government by Alibaba Group Holding founder Jack Ma.
Though the clampdown began to subside last spring, the sector's absence from this year's Two Sessions suggests that the government's wariness of internet tech tycoons' influence persists.
https://asia.nikkei.com/Politics/China-People-s-Congress/About-100-Chinese-Congress-delegates-chosen-from-U.S.-targeted-companies
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