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Hello, this is Kenji from Hong Kong.
A lot of discussions and news coverage here lately has been about the long-awaited, high-level Communist Party gathering in Beijing, known as the third plenum.
The conference is completely closed-door but it is still closely monitored and analyzed due to its historical impact on policy. Perhaps the most notable third plenum was the one held in December 1978, where then-paramount leader Deng Xiaoping put China on the path of "reform and opening-up." The bold new policy pulled the country out of the shambles of the Cultural Revolution and paved the way for it to become the world's second-largest economy.
I'll refrain from speculating on the outcome of the current meeting, as the results should be known shortly after this newsletter is published, but the Chinese propaganda machine has been busy depicting President Xi Jinping as "outstanding a reformist as Deng Xiaoping." On Monday, when the plenum kicked off, Xinhua published a lengthy report full of examples of how Xi has been instrumental in pushing forward a series of reforms.
It argues, for example, that Xi's visit to SAIC Motor 10 years ago helps explain how China's auto industry switched gears to electric vehicles and became a competitive global player. Meanwhile, the pain of overproduction in the steel industry has been "relieved" via the president's reform efforts.
Xi is also credited with initiating the "energy revolution," as the country leads in solar, wind, hydro and biomass generation facilities. In fact, the whole new wave of latest tech trends -- artificial intelligence, life sciences, quantum computing, nanotech, new materials, space and deep-water technology -- is "in the same line with the innovation-driven development strategy put forward by Xi Jinping," according to the Xinhua report.
That said, the country's economy is slowing and genuine reform will likely be needed to tackle various structural issues. Even some of the most strategic and advanced parts of the economy have been hurt, as can be seen in the rare-earths sector.
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Rare opportunities
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For Chinese authorities, rare earths are arguably among the economy's most valuable assets. The importance they place on these materials is reflected in the hands-on approach to consolidation in the industry and a new law that is bringing the supply chain more firmly under official control.
But the substantial level of state intervention has not saved listed state players from serious losses or sharp falls in profit as prices continue to fall, Nikkei Asia's Kenji Kawase reports.
The largest chunk of global reserves of the 17 rare-earth elements -- which are indispensable for everything from smartphones and electric vehicles to wind power generators and missile defense systems -- is under the ground in China.
Deng Xiaoping recognized the significance of rare-earths long ago, famously saying, "The Middle East has oil, China has rare earths." Beijing has been increasingly willing to use these minerals in even more strategic ways, as it sees them as a tool to "ensure national resource security and industrial security," according to the ordinance to be enacted in October.
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Samsung's struggles
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Samsung is wrestling with growing worker unrest and setbacks in chip production that have seen it fall behind rivals in areas identified as essential for future growth.
The South Korean technology giant is trailing SK Hynix and U.S. chipmaker Micron in developing high-bandwidth memory (HBM) chips, a crucial component of AI systems, and is yet to pass tests required to qualify as an HBM supplier to industry leader Nvidia, Christian Davies and Song Jung-a write for the Financial Times.
The company has also failed to make a dent in TSMC's dominance of the global foundry business -- the market for contract manufacturing of processor chips -- despite optimism that big customers would seek to reduce their dependence on the Taiwanese chip giant amid heightened geopolitical risks.
Last week the National Samsung Electronics Union, which has seen its ranks grow from 10,000 to more than 30,000 in the space of a year, announced it would launch an "indefinite strike" that would target production lines, including those used to manufacture HBM chips.
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India's EV sales
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While China is far ahead in the adoption of electric vehicles (thanks to Xi, according to Xinhua), India is starting to catch up. This colorful report by Nikkei's Ryosuke Hanada, Suzu Takahashi and Shinya Sawai looks at the trends driving India's adoption.
About 90,000 four-wheel EVs were sold in the country during the fiscal year through March, only 2% of total vehicle sales, but that is still nearly double from the year before.
Electrification is even more apparent in two- and three-wheelers, where the sales were about 950,000 and 600,000 units, respectively, during the last fiscal year. According to projections by Mitsui & Co. Global Strategic Studies Institute, electric vehicles are expected to make up 60% of all four-wheel sales, 90% of two-wheel sales and 20% of three-weel sales by 2030.
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Heavier, hungrier, pricier
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The fast-rising demand for generative artificial intelligence is creating a pressing need to drastically redesign data centers and all of their supporting infrastructure, write Nikkei Asia's Taipei-based tech correspondents Cheng Ting-Fang and Lauly Li.
In their interview, Johnny Liu, the president of leading Taiwanese data center operator Chief Telecom, described how AI servers are eating up more electricity and becoming far heavier than their traditional counterparts. A cutting-edge AI computing data center, for example, can require as much as 20 kilowatts of power grid capacity, compared to around 5 kW for a traditional type. And the weight of a new AI server rack is projected to reach up to 2,000 kilograms, compared to less than 1,000 kg for a conventional rack. And because these latest servers are more expensive, they need better protection.
What this all means is more money. "The overall cost of this new form of buildings will be at least 50% higher than typical data centers," Liu said.
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Tech Latest by Nikkei Asia brings you the newest updates from Asia's technology industry. In this episode, Jada Nagumo talks to Bangkok correspondent Francesca Regalado, about Chinese EV maker BYD's new Thailand factory.
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