More palace intrigue: Nissan ousts 2nd in command

Nissan was dealt another blow last week when word leaked out to the Financial Times that Ashwani Gupta, its chief operating officer and number two in command, was being pushed out in what appears to be another palace coup.

Gupta, 52, will officially step down on June 27 after a short and undistinguished career at the automaker. Previously serving in executive capacities at Renault and Mitsubishi Motors, Gupta was named COO on November 1, 2019, replacing Yasuhiro Yamauchi in a management shakeup that took effect on December 1 and also elevated Makoto Uchida to president and CEO.

Nissan had been forced to make changes after losing its top three executives — first Carlos Ghosn and Greg Kelly as part of a management coup in November of the previous year, 2018, to block the merger with Renault, and then CEO Hiroto Saikawa at the September 2019 board meeting for receiving a 47 million yen windfall from a backdated shareholder appreciation rights (SARs) bonus.

Another recent twist in the ongoing Nissan saga: Ghosn has sued the company for $1 billion in a Lebanese court. Lebanon is where he has lived since fleeing Japan while out on bail awaiting trial on criminal charges, which he and his lawyers say (with strong evidence to back them up) were part of a Nissan management faction’s coup d’etat aided and abetted by elements of the Japanese government.

Carlos Ghosn’s home in a wealthy neighborhood of the Lebanese capital Beirut. Photo: Asia Times files / AFP / Anwar Amro

Ghosn, Kelly and Saikawa were all representative directors at the time of Ghosn’s and Kelly’s arrests on November 19, 2018. Nissan had three representative directors (daihyo torishimayaku in Japanese) on its then nine-member board. In June 2019, the automaker expanded the board to 12, with a majority coming from outside the industry, as the board shifted focus to governance.

Only three directors, including Gupta and Uchida, came from the industry. Now, there will be two. The current frontrunners to replace Gupta, according to our sources, are Guillaume Cartier, who chairs the management committee running Nissan’s business in Europe, India, the Middle East, Africa and Oceana, and Jeremie Papin, president of Nissan North America Inc. and chair of the management committee for the Americas region.

Guillaume Cartier. Photo: Nissan

Cartier is believed to be the top choice.

To elevate one of them to the board will require an extraordinary shareholders’ meeting since the agenda for the June 27 meeting has already been set and includes the addition of one new outside director and the retirements of two, bringing the total down to 10.

Moreover, market share fell to 5.5% in the US and 2.1% in Europe. 

In fiscal 2017, the last full year Ghosn was in management, Nissan’s share in the two markets (including Infiniti sales). Meaning: The automaker has lost ground to the competition.

Globally, market share fell to a 50-year low, to 4.1%. And while Nissan is profitable again, posting a 3.6% operating profit margin, its margin is lower than every major automaker outside China except Honda and, in Honda’s case, only if one excludes its profitable motorcycle business.

Thus, it is hard to grade Gupta’s tenure because the company, in addition to being profitable again, is generating positive cash flow, with an estimated 1 trillion yen in the bank.

For that reason, there remain questions about why Gupta is being removed. We reached out to Nissan and didn’t receive a response.

However, the FT reported that Gupta was vying for the CEO’s job. We have been told that Gupta wasn’t shy about promoting himself, but have never interviewed him. On the other hand, Nissan had co-CEOs (Saikawa and Ghosn) from October 2016 through March 2017; Ghosn moved up to chairman in April. So there is some precedent for sharing the title and dividing responsibilities.

The FT also reported without offering details that there had been “complaints” against Gupta. Given Nissan’s history of leaking negative information about Ghosn, we believe that one should take such reports with skepticism.

It was on May 18 (first reported Tuesday of this week by Blooomberg) that Ghosn filed a $1 billion damages suit in Lebanon against Nissan and 12 executives including Hari Nada, Masakazu Toyoda and Motoo Nagai. 

All three, the latter two as outside directors, were involved with planning the coup and/or the coverup that followed.

Nagai, who chairs the board’s audit committee, shut down the internal investigation when Christina Murray and Ravinder Passi, Nissan’s global compliance chief and global general counsel, turned their attention to Nada, who had entered an immunity agreement with the Tokyo prosecutors’ office several weeks before Ghosn’s arrest and never informed the board.

Nada is still a corporate officer with the title of senior vice president. Nagai, who reportedly was involved with Gupta’s ouster, will remain on the board. Toyoda, a former government bureaucrat, will retire.

A more likely reason for Gupta’s removal, according to our sources, is that Renault wanted him out. According to our sources, Gupta wasn’t acceding to Renault’s demands following changes made to the alliance structure in February whereby all decisions must be consensual.

Although considered to be the most talented auto executive on Nissan’s board, he was taking a hard line with his former employer. Gupta joined Renault in 2006, then switched to Mitsubishi Motors (the third member of the alliance) in 2019 before joining Nissan.

Among the issues in dispute: Nissan’s extensive intellectual property, to which Renault wants greater access, and Nissan’s active involvement in Renault’s Ampere EV project including taking a minority 15% equity stake.

Concept of the Renault Ampere. Photo: Motor.es

Renault is moving forward with the project, having announced this week (June 19) that its CEO, Luca de Meo, will be the future chairman and CEO of Ampere. De Meo will hold both positions, while Renault’s chairman, Jean-Dominique Senard, has been tasked with setting up a committee to oversee the initial public offering. Senard, a former tire industry executive, serves concurrently as vice-chair of Nissan’s board.

According to one of our sources, Uchida is perceived to be “more pliant” than Gupta. 

Not clear, looking at the market, is how Ampere will benefit Nissan. The Japanese automaker’s main markets outside Japan are China and the US, not Europe. And both automakers have seen their EV shares fall globally to less than 2%, according to EV Volumes.

CLSA analyst Chris Richter warns:

If Gupta’s misgivings about investing in Ampere and keeping Nissan’s IP secure were truly behind his departure — granted, the FT article cites other issues as well — we would note that many of Nissan’s minority shareholders share the same concerns and wonder how strongly independent board members who were allegedly behind his removal are serving Nissan’s minority shareholders….

Optics of the Gupta situation are really terrible because they focus on the wrong things — palace intrigue, investigations and backstabbing. They also ignore the fact that Nissan has potent competitors. While the industry is undergoing the biggest change in a century —  it is going to be difficult for anybody in industry to survive — Nissan is wasting time.

I worry that they’re not going to be able to hire somebody of equal competence. Nissan’s got a lot of work to do and the competition isn’t waiting for them. Gupta was the point man driving forward Nissan’s advancement on profits, new products and electrification….

Cash flow has been getting consistently better. That’s been good news. It means their transformation plan is working and they appear to be on a road to recovery [but] Nissan doesn’t benefit from this kind of instability. The loss of Gupta is significant.

Roger Schreffler is a veteran of nearly four decades as a Japan automotive correspondent and is a former president of the Foreign Correspondents’ Club of Japan.

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China urged to boost home prices or face recession

Economists and property experts have called upon the Chinese government to stimulate home prices and resolve local debt problems that were highlighted when housing markets slumped last month.

The People’s Bank of China (PBoC), the country’s central bank, on Tuesday lowered the one-year loan prime rate (LPR) from 3.65% to 3.55%, and also cut the five-year rate from 4.3% to 4.2%. It is the first time the bank has slashed LPRs in 10 months, following last week’s reduction of the medium-term lending rate from 2.75% to 2.65%.

The move also follows an announcement by the National Bureau of Statistics (NBS) on June 16 that more Chinese cities had recorded property price drops in May than in April. 

Some analysts said property developers had tried to raise prices in April but then faced huge resistance from homebuyers, so they cut prices again in May. They said such a trend resulted in downward pressure on the secondary markets in most Chinese cities last month.

Some property experts and economists say the worsening local government debt problems have hurt homebuyers’ confidence in recent months. Media reports say Yunan, Guizhou and Guangxi provinces have warned that they may default this year. 

Zhao Yanjing, vice president of the China Association of City Planning and a professor at Xiamen University, says in an article that the central government should help local governments resolve their debt problems, prevent them from selling lands at discounts, extend bank loans for families, companies and local governments, and also limit capital outflow. 

“China’s current economic slowdown is not related to external trade, which has remained stable over the past three years despite the negative impact of the trade war, the Russian-Ukrainian war and the epidemic,” he says. “The real cause of the crisis is that we have a big debt problem on our balance sheets.”

He adds: “Since July 2021, property markets have been suppressed by policies, leaving a lot of homes and land in the markets. In this situation, families, companies and local governments dumped their assets, resulting in further contraction in asset prices and a vicious cycle of debt problems.”

He says the central government should bail out the heavily-indebted local governments – because it was the center that had capped land prices and that also had taken away some of the local governments’ land sales revenue in the past, making them unable to repay their debts. He says the central government should purchase the local governments’ non-performing assets and revitalize them. 

He warns that China will face an economic recession if no actions are taken.

Local government debts

Zhao’s comments were first made in a forum organized by the CITIC Foundation for Reform and Development Studies on February 25. They were summarised by CITIC Group’s Economic Herald and reprinted by Guancha.cn on Monday.

The Economic Herald on June 15 also published a series about what the central government should do to resolve the worsening local debt problems. 

Zhang Ming, a financial expert at the CITIC Foundation for Reform and Development Studies, says in one of the articles that the central government’s property curbs have hurt property developers’ income and ability to buy lands in recent years. Zhang says that, because local governments could not generate enough revenue through land sales, they turned to further borrowing to continue their investment projects.  

“At present,” Zhang says, “local governments are facing huge expense pressures. They should be allowed to impose new taxes, such as consumption tax, and to transfer some of their medical and social security expenses to the central government as they cope with aging populations. In the future, we should base appraisals of local governments not only on their GDP growth but also on the scale of their indebtedness.”

Citing the International Monetary Fund’s data, Zhang says China’s total government debt-to-GDP ratio was about 108% as of mid-2022, which is not high when compared with the United States’ 110%. However, he says it’s unhealthy that local governments, not the central government, are bearing most of these debts.

According to China’s Ministry of Finance, the outstanding amount of local government debt grew 15.1% to 35.06 trillion yuan ($5.02 trillion) at the end of last year from 30.47 trillion yuan a year earlier. 

Sluggish property markets

On June 15, the NBS said that 24 out of 70 major Chinese cities recorded year-on-year price drops for their newly-built properties in May, compared with only seven in April. It said 55 cities reported property price drops in their secondary markets in May, compared with 34 in April.

In the first five months of this year, overall property prices fell 0.9% from the same period of last year.

“The real estate market is still recovering and facing many challenges,” NBS spokesperson Fu Linghui said in a media briefing. “In the next stage, the Chinese economy will continue to recover, and the government’s supportive measures will show effects. Market expectations will also improve, helping to stabilize home prices.”

“Property prices have declined month-on-month for two consecutive months, April and May, meaning that the small rebound in the first quarter failed to carry over,” said Yan Yuejin, director of the research center of E-house China. “Due to rising sales pressures, property developers slashed prices significantly in some cities last month, hurting the overall markets.”

Chief researcher Li Yujia of the Guangdong provincial residential policy research center said price-sensitive young homebuyers were scared away when property developers tried to raise prices in April. Li said property developers then cut prices again. 

Although the PBoC lowered the loan prime rate by 10 basis points on Tuesday, some analysts said it is not strong enough to turn around the unfavorable market situations.

Chen Wenjing, market research director of the China Index Academy’s index division, writes in a research note that, as the downward pressure in the property markets is growing, more and more people are expecting that the government and the central bank will unveil new supportive measures. 

She says property developers probably will be able to borrow more easily and slow their sales campaigns while regulators will launch new rules to lower property transaction costs.

Read: China retail sales growth slow, job markets shaky

Follow Jeff Pao on Twitter at @jeffpao3

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No thaw after Blinken visit to China as US allies slip their leash

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Yuan is internationalizing more than meets the eye

China has made clear its discontent with the role of the US dollar in the international economy and its intention to internationalize the RMB as an alternative international currency.

A popular narrative tells us that as China is now the world’s second-largest economy, the largest trading nation and the largest trade partner to 120 countries, it is inevitable that the RMB will play a larger role in the international economy. A side effect of the move to a more RMB-centric international economy will be the loss of US economic power. 

If the United States continues to weaponize its dollar hegemony, this is only bound to accelerate the diminishment of the dollar. The United States would be best served by refraining from using economic statecraft to pressure countries to adhere to its wishes.

China has already developed the “financial plumbing” required to facilitate the internationalization of the RMB. The country has developed an alternative cross-border payments system (CIPS) to rival Fedwire and the Clearing House Interbank Payments System. China’s Alipay and Tencent pay have also now been widely adopted abroad. 

And since 2020 China has been trialling its Digital Currency Electronic Payment network, which has the potential to accelerate international use of the RMB.

Perhaps more telling than what China has done to facilitate the international use of the RMB is what it has not done. As China has internationalized its own balance sheet, it has remained decidedly dollar-centric. 

China is still wedded to a policy of exchange rate targeting and requires large dollar reserves of its own — in part because of the high propensity for domestic capital flight — which is problematic when it’s promoting the greater international use of the RMB. China is yet to liberalize its capital account to make the RMB freely exchangeable — a prerequisite for reserve currency status.

China’s capital markets remain underdeveloped with both regulated and limited foreign participation. Foreign issuances denominated in RMB remain small.

Nor has China shown a willingness to become a net supplier of RMB to the world by running current account deficits, preferring instead to lend RMB to other central banks through swap arrangements. 

While China has facilitated the use of the RMB in trade, it remains a long way from having the overarching macroeconomic structure that would make it a contender for reserve currency status.

This is important because it is through trade that countries earn the foreign exchange required to service their foreign currency-denominated liabilities. Earning RMB through trade is a risky way to earn income to service a dollar-denominated debt. 

China wants its currency to rival the dollar in international trade and settlements – but it’s not that simple. Image: iStock

There is no sustainable dichotomy between the currency denomination of trade and the currency denomination of a country’s foreign assets and liabilities. The majority of the world’s foreign currency debt is denominated in US dollars and very little is denominated in RMB.

These observations strongly challenge the narrative that the dollar is in decline and the RMB will replace it in the international economy. Many of China’s largest trading partners, such as Hong Kong and Saudi Arabia, continue to operate on a de facto dollar standard. The RMB has gained the greatest traction among countries, such as Iran, that have strong geopolitical reasons for abandoning the dollar.

With the ratcheting up of Western sanctions against Russia, many countries in the southern hemisphere have expressed a desire to reduce their dollar dependency. Not least among these has been the disclosure that Saudi Arabia and Brazil will use the RMB for bilateral trade with China. In both cases, China enjoys considerable monopsony power, being the largest importer of hydrocarbons, soy products and iron ore.

Despite the speculation, China’s progress appears limited. According to SWIFT data, transactions denominated in RMB accounted for less than 1.5% in December 2022 — slightly more than those denominated in Australian dollars and less than those denominated in Swiss francs. This puts RMB in a distant 7th place. The US dollar accounts for nearly 48% of the total.

There are two reasons why the RMB’s diminutive market share in cross-border payments using SWIFT might not be a fair reflection of the RMB’s use in trade. First, not all cross-border transactions use SWIFT. Estimates by ANZ’s China research team suggest that about 20% of transactions settled using China’s own CIPS system do not use SWIFT.

Second, the total size of the cross-border payments market — around US$170 trillion per year — is about eight times larger than world merchandise exports at $22 trillion. 

If one assumes the vast majority of international RMB usage is trade-related and not asset related — which seems reasonable given the low foreign participation rate in RMB-denominated asset markets and China’s dollar-centricity when it comes to their foreign assets — it might be that about 5-7% of world trade is already denominated in RMB, though such estimates need to be treated with caution. CIPS itself saw a 75% growth in settlement volume in 2021 to about 80 trillion RMB or US$13 trillion.

Some might interpret this level of RMB usage as disappointing. But if a collateral purpose of RMB internationalization is to immunize China from potential Western sanctions while providing sanctioned countries with a workaround and to provide efficiency gains in bilateral trade, then it is highly satisfactory from a Chinese perspective. 

The US has extended its sanctions on Russia to countries that support or sell to its military. Image: Facebook

The return of Russian oil exports to above 2019 pre-war levels demonstrates that sanctions, though supported by countries representing more than half the world’s GDP, have lost some of their efficacy even while the US dollar remains hegemonic.

The ability to cut selected institutions out of the SWIFT system is a powerful tool of economic statecraft. But it must be remembered that trade took place before SWIFT was established and it is still possible — albeit more inconvenient and expensive — to conduct trade without SWIFT today. 

If China is outside the sanctions, an RMB-based financial ecosystem helps facilitate and reduce the costs of sanction circumvention — as it was, in part, designed to do.

Stewart Paterson is Research Fellow at the Hinrich Foundation and Head of Economic Risk at Evenstar. This article was originally published by East Asia Forum and is republished under a Creative Commons license.

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Covid keeps N Korea in starving self-isolation

Three years after Covid-19 hit, people around the world have regained their freedom to move between countries.

One country is an exception: North Korea, or the Democratic People’s Republic of Korea (DPRK), where always-severe limitations on mobility turned into virtually absolute prohibitions during the pandemic.

In January 2020, Kim Jong Un decided to isolate the entire country even more drastically than usual from the outside world in response to Covid. And in June 2023, the DPRK remains closed except for some trade with China.

Not long after closing the borders, Kim Jong Un warned of the possibility of a second “arduous march,” a reference to the famine that killed at least 600,000 people – some researchers estimate multiples of that number – in the 1990s.

This is what severe malnutrition did to North Korean youngsters during the great famine of the 1990s. Photo: BBC

And now the BBC has placed its imprimatur on reports that there are, once again, severe food shortages inside the country.

By June 2021, Pyongyang watchers already anticipated food shortages. But instead of opening the borders, Kim urged his people to stay strong in the face of “tremendous challenges” of Covid.

Even before the border closure, China was North Korea’s only reliable trading partner due to international sanctions imposed in response to Pyongyang’s pursuit of nuclear weapons.

Due to the collapse of the public distribution (rationing) system during the famine in the 1990s, people living in the country’s northern border regions took to smuggling in food, medicines and other daily necessities, mostly from China.

Illicitly traded goods were circulated through jangmadang (grey or informal markets), and it became an important survival mechanism for the country’s economy.

But with the lockdown, both official and unofficial trading was shut down. At the state level, trade between the two countries has slowly resumed but is nowhere near pre-pandemic levels. Due to strict policing of the border, smuggling has become pretty much impossible, making the jangmadang almost inactive.

In a report published on March 21 2023, the United Nations called for an end to what it described as the DPRK’s “unparalleled self-isolation.” Special rapporteur Elizabeth Salmón said:

I am seriously concerned about the impact of three years of border closures on the people of the DPRK, especially women working in informal markets, people living in poverty, the elderly, the homeless and kkotjebi (homeless children).

She particularly highlighted the plight of women who have faced increasing violence due to their inability to put food on the table for their families.

Inside information

But because it is difficult to get information from inside North Korea, it is hard to assess just how bad the situation has become.

Even before the pandemic, those of us who watch North Korea from the outside already had limited access to information, but since the shutdown it has become scarcer. Former information sources – such as diplomats and aid workers – have been shut out.

Since the border closure, cases of defection from the regime have dramatically decreased, so we do not get to hear much from defectors. Another informal (and limited) way of getting up-to-date information – asking defectors’ families, when they confirm receipt of remittances – has become more limited.

Lacking adequate triangulation methods for the information, we can confirm inside information only partially. For example, in May 2023, the South Korean National Intelligence Service (NIS) reported that a group of ten defectors had escaped by sea and confirmed the stricter regime controls.

This leaves us with two conflicting images of Kim Jong Un’s North Korea. While ordinary people are suffering from starvation, the Kim family and their close regime members are well off.

Kim Jong Un’s ten-year-old daughter, Kim Ju Ae, frequently appears in public media in expensive luxury outfits, while most ordinary citizens barely have access to basic supplies. And the North Korean government continues its program of missile tests, despite the crippling economic difficulties.

Kim Jong Un with his daughter Kim Ju Ae, who’s wearing a coat that a sharp-eyed South Korean TV broadcaster spotted as a Christian Dior. Photo: KCNA

There are reports of resentment among ordinary people, especially when they see the glamorous Kim Ju Ae on their TV screens. One anonymous person told Radio Free Asia that:

I find it uncomfortable to see Kim Jong Un’s daughter dressed up more than an adult and getting special treatment, like when she walks the red carpet side beside Kim Jong Un and they pass in front of cheering crowds.

But he added that nobody dares say anything publicly.

Why don’t the people rise up?

A BBC documentary broadcast recently quoted three interviewees who spoke of a shoot-to-kill policy for people trying to either defect or cross the recently reinforced border to smuggle food and medicines.

They spoke of rising disaffection with the regime, but also said that the level of fear of informers was such that nobody dared speak openly, let alone protest or even petition for reform.

People in North Korea are paralyzed by the regime’s politics of fear, its surveillance system, its control of mobility and its songbun (class system), which strictly controls people’s status and life chances. People at the top have a vested interest in keeping things the way they are.

Beneath the ruling caste there is no real civic leadership. And such is the level of fear that being aware that regime propaganda bears little resemblance to reality has not led the people to organize against the repression and hardship.

There is hope that North Korea will open its borders somewhat in 2023, such is the need for trade and foreign currency.

If so, this perhaps is a time for the rest of the world to consider how to enable the positive development of civil society in North Korea, rather than focusing simply on the negatives of the regime.

Sojin Lim is a reader in Asia Pacific studies with special reference to Korea, an MA North Korean studies course leader and a co-director of the International Institute of Korean Studies at the University of Central Lancashire.

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Read: North Korean children’s food situation still dire

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China rushes to market with next-gen solar cell

Chinese scientists have successfully boosted the efficiency of a new generation solar cell to 28% in a race with foreign rivals who achieved the result in December 2018 and have since pushed that level to 33.2% in April this year.

Not waiting for solar perfection, some Chinese firms, including a company established by China’s leading researcher, already have gone into production of perovskite and silicon tandem solar cells (PSC).

This so-called third-generation solar cell is said to be able to convert 50-75% more sunlight into electricity than the traditional silicon photovoltaic (PV) cell.

The product is also 95% cheaper than the silicon solar cell as its key raw material is methylammonium lead iodide, making it a potential great option for countries that want to switch to solar power to meet their carbon neutrality targets.

Tan Hairen, a professor at Nanjing University’s College of Engineering and Applied Sciences, and his team announced their PSC technology “breakthroughs” in an article published by Nature, a London-based weekly scientific journal, on June 8. 

According to the article, Tan’s team has achieved an efficiency of 28%, which means 28 out of 100 units of incoming sunlight can be converted into electricity, on a research-sized PSC of 0.49 square centimeters.

In January 2022, the team achieved 26.4%. At that time, it also recorded an efficiency of 24.2% on a larger PSC (1.04 square cms) and 21.7% on a mini-module-sized one (20.25 square cms). The bigger the size of a solar cell, the lower the rate of efficiency it can achieve.

In 2017, when this photo was taken, post-doctoral researcher Tan Hairen and his colleagues in Professor Ted Sargent’s lab at the University of Toronto removed a key barrier to the manufacture of low-cost perovskite solar cells. Now, six years later, Tan is head of a lab in Nanjing and has started his own company to commercialize the third generation cells. Photo: University of Toronto / Kevin Soobrian

Tan had said in a previous interview that during the research his team had considered different factors including the production and material costs.

He also said his Renshine Solar company started making PSC modules with efficiency ratings of 18% in February. He said such a product is commercially viable as it has an output equivalent to that of a traditional silicon solar cell with 20% efficiency.

By comparison, the most efficient silicon solar panels currently available in the markets have an efficiency of 22.8%. Most panels are only 15 to 20% efficient.

In May last year, the United States Department of Energy’s National Renewable Energy Laboratory (NREL) created a silicon solar cell with a record 39.5% efficiency, though it is not yet commercially available.

In terms of research-sized PSCs, many scientists in the world have already entered the club of 30% efficiency. The United Kingdom’s Oxford PV had set world records at 28% in December 2018 and 29.52% in December 2020.

A team at Helmholtz Zentrum Berlin (HZB) in Germany achieved 29.8% in November 2021 and 32.5% last December. On April 16, researchers at King Abdullah University of Science and Technology (KAUST) in Saudi Arabia achieved 33.2%, which remains the world record so far.

The Duong, a researcher at Australian National University (ANU), which recorded a 30.3% efficiency in February this year, said it is important to surpass the 30% mark as that is considered a threshold for the commercialization of tandem technology.

Build it and they will come

The ANU cells have not gone into production. Duong said mass production of PSCs will be practical by 2026.

Some firms, however, Renshine being an example, prefer to go for commercialization – even if on a very small scale – as early as possible to secure a first mover advantage.

Last month, Oxford PV set a world record of 28.6% efficiency on a commercial-sized PSC (258.15 square cams) known as M4.

Seoul-based solar manufacturer Hanwha Qcells, partnered with the HZB, also announced last month that it would invest US$100 million to build a pilot tandem-cell production line in Jincheon, South Korea. The factory will commence mass production by 2026. Without disclosing the size, Qcells said its PSC has a 29.3% efficiency.

Qcells has already invested in a four-year perovskite research project in Europe. Image: Qcells

Duan Xiaohu, an analyst at East Asia Qianhai Securities Co Ltd, published a research report in March saying that some Chinese solar panel makers, including GDL Power, MicroQuanta and Utmolight, have started making PSCs, although their products may have short life spans and low efficiency.

“Methylammonium lead iodide, the most common raw material of PSCs, has a low stability, which may result in a short life span of the solar cells,” Duan says in the report. “Besides, there are usually more defects on larger PSCs, meaning that it is difficult to produce a large solar cell while maintaining high efficiency.”

Last July, MicroQuanta delivered a batch of 5,000 units of its PSCs to a power station in Zhejiang for a trial run. Media reports said the company achieved efficiency of 21.8% on a PSC with a size of 19.35 square centimeters.

Read: China’s fastest yet quantum computer still way behind US

Follow Jeff Pao on Twitter at @jeffpao3

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Commentary: North Korea remains in COVID-19 isolation, raising fears of famine

PRESTON, United Kingdom: Three years after COVID-19 hit, people around the world have regained their freedom to move between countries. All except in one country: North Korea or its official name, the Democratic People’s Republic of Korea (DPRK).

In January 2020, Kim Jong Un decided to isolate the entire country from the outside world in response to COVID-19. And in June 2023, North Korea remains closed except for trade with China.

Not long after closing the borders, Kim warned of the possibility of a second “arduous march”, a reference to the famine in which at least 1 million people – more likely double that – starved to death in the late 1990s. By June 2021, Korea watchers already anticipated food shortages. But instead of opening the borders, Kim urged his people to stay strong in the face of “tremendous challenges” of COVID-19.

Even before the border closure, China was North Korea’s only reliable trading partner due to international sanctions imposed in response to Pyongyang’s pursuit of nuclear weapons.

Due to the collapse of the public distribution system during the arduous march in the 1990s, people living in the country’s northern border regions took to smuggling in food, medicines and other daily necessities, mostly from China. Illicitly traded goods were circulated through jangmadang (grey or informal markets), and it became an important survival mechanism for the country’s economy.

But with the lockdown, both official and unofficial trades were also shut down. At the state level, trade between the two countries has slowly resumed but is nowhere near pre-pandemic levels. Due to strict policing of the border, smuggling has become pretty much impossible, making the jangmadang almost inactive.

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Commentary: What Western tech firms can learn from LinkedIn’s failure in China

For instance, it was not possible for users to immediately click on a new connection’s profile; the only way to find them was to remember their name and search for it on the platform.

Shen’s team raised a request to create a list of new contacts that users can navigate – taking a page from the Chinese social tool WeChat – but the US product managers were “too lazy to copy a feature that works for a competitor”. 

On the surface, it seems that arrogance and lack of market understanding are the key reasons for LinkedIn China’s eventual demise. But these are merely symptoms of deeper issues, namely a lack of mental bandwidth at the top and the organisation’s setup.

To succeed in a new market, thousands of decisions need to be made, products need to be continuously iterated, and sometimes complete pivots are necessary. This is especially when you are facing strong homegrown competitors led by committed founders with ready access to the best talent. 

All of these demand leaders’ attention. How much resources to dedicate to the new market, knowing that things rarely go according to the business plan? When products change or additional resources are required, how fast can you get them to the ground? When the business significantly underperforms, would you continue to invest or cut the loss?

HARD FOR TECH GIANTS TO ADJUST TO FOREIGN MARKETS

That was the challenge that US e-commerce juggernaut Amazon faced. Amazon entered China in 2004, around the same time Alibaba launched Taobao.com, but exited in 2019. The market for Amazon in China was small compared to its home market in the US. 

As a company, Amazon was (and still is) logical and strong in execution. In the US, it uses sales predictions to allocate resources and inventories. The natural thing to do is to apply the same logic to China – so if it predicted sales in China were going to shrink, it would reduce inventories and logistical infrastructure to rein in cost.

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Nation up 3 spots in global list

Thailand has climbed three spots to 30th place in the World Competitiveness Ranking released on Tuesday by the International Institute for Management Development (IMD).

It improved in all four main indicators used to compile the rankings, but “infrastructure” remains its weak link.

The country jumped to 16th place from 34th last year in economic performance. It also rose to 24th from 31st in government efficiency and to 23rd from 30th in business efficiency. However, it only edged up one spot to 43rd place in the infrastructure category.

Thailand ranked 25th overall in 2019 and 33rd last year.

Denmark, Ireland and Switzerland were the top three countries, respectively, among the 64 economies measured in the 35th annual edition of the influential survey.

“All three are small economies that make good use of their access to markets and trading partners — as does Singapore, which came fourth,” Switzerland-based IMD said.

“Navigating today’s unpredictable environment requires agility and adaptability,” said Christos Cabolis, chief economist of the IMD’s World Competitiveness Center.

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