China is increasingly decoupling from the global economy

Beijing, Berlin, Düsseldorf Mostly once a year, China’s head of state and party leader Xi Jinping gives a speech to high-ranking ministry and provincial leaders at the Central University of the Communist Party, which sets the course for the year. But this time it had a special meaning. Because the five-year plan is currently being finalized, which should set the course for the economy in the People’s Republic from March to 2025.

Foreign company representatives may not have liked what Xi said behind closed doors earlier this week. “The most essential feature of building a new development pattern is to achieve a high level of self-sufficiency and self-improvement,” says Xi. ”

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What researchers expect this year

  • The Coronavirus was devastating in its effect on health and economy, but accelerated it technical progress and increased the Acceptance of digital tools. Bring one in 2021 new productivity boost – and thus new ones Growth opportunities for Germany?
  • From mRNA active ingredient on the Quantencomputer until Internet from space: The Handelsblatt provides the 17 most promising technology trends of the year in front.
  • “We’ll work much more productively,” predicts US bestselling author Rohit Bhargava for the time after Corona. In the interview with the Handelsblatt, the innovation expert explains how to recognizes and uses important trends early on.

Robert Solow said in 1987: “Computers can be found everywhere, except in productivity statistics.” From the point of view of the time, the economist’s complaint was understandable. Five years earlier, “Time” magazine celebrated the computer on its cover that would soon be in every living room. But then from an economic point of view – nothing at first.

In retrospect we know: Solow was too impatient. New technology has to be introduced, adapted, networked and accepted. This will need time. Also due to ever more powerful computers, there actually was a productivity boom in the 1990s.

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That’s how important the Chinese are for the German 5G network

Huawei

The Chinese telecommunications giant is under special observation in Europe.

(Photo: Reuters)

Berlin, Düsseldorf Germany does not want to exclude the controversial Chinese network supplier Huawei from the 5G cellular network, but is planning strict controls. This is provided for in a corresponding draft law by the federal government, which is available to the Handelsblatt.

The decision will have far-reaching consequences for the network expansion, because Huawei is already a central supplier of equipment for all three network operators in Germany: Deutsche Telekom, Vodafone and Telefónica.

In particular, 5G mobile communications are intended to promote the networking of industry. Therefore, the fear of espionage and sabotage is particularly high. In addition to the European companies Ericsson and Nokia, the Chinese company Huawei is one of the most important network equipment providers for 5G.

However, US and German security authorities have identified Huawei as a security risk. The company disagreed. Huawei did not want to comment on the bill when asked.

The draft of a “Second Law to Increase the Security of Information Technology Systems”, called IT-Sic 2.0 in the Berlin jargon, stipulates that equipment manufacturers such as Huawei must issue a guarantee in which they assure that their technology does not leave any back doors open for cyber attackers.

In addition to a technical test, there should also be a political prohibition. This should give the ministries involved the opportunity to restrict the use of network technology from a political perspective. The plan is against the background of far-reaching state intervention options by the Chinese government on companies in the country.

The network operators in Germany are now facing a problem. They didn’t want to wait any longer for the political decision in Berlin and had already expanded their 5G networks with Huawei. In most cases, they had expanded their existing 4G networks for 5G. Even with 4G, the proportion of Huawei components in the wireless networks is very high: around 65 percent at Telekom, 55 percent at Vodafone and 50 percent at Telefónica.

The dismantling of an outfitter is complex and expensive. A spokesman for Deutsche Telekom said: “We are currently evaluating the extensive draft in detail and will not comment on it in advance.” Vodafone said: “The draft is very extensive, and we will now examine it carefully and use the consultation period. to formulate any concerns – the implementation will in any case present us with challenges. “

A Telefónica spokesman said: “It is important that the envisaged certification quickly creates legal certainty for the use of certain components.” He demanded that the federal government should allow sufficient time for the dismantling if a provider is excluded. On the other hand, several politicians in Berlin had criticized the network operators for having already started the 5G expansion without waiting for the decision on how to deal with Huawei.

The Handelsblatt learned from corporate circles that the mobile phone companies will initially continue to rely on the Chinese for network expansion. The costs would be too high to switch now – the German network operators are not as dependent on any company as Huawei. However, the companies are likely to take a great risk.

Because if the government should exercise its veto and the prohibition reservation take effect, the network operators would have to deal with considerable effort and costs. The Chancellery and the Federal Ministry of Economics had long resisted creating the prerequisites for excluding a provider for political reasons – for fear of the reaction of the Chinese. With this position, however, they could not assert themselves against the SPD and parts of the CDU.

For the US government, the planned decision in Germany did not go far enough. “There can be no trust when telecommunications equipment suppliers are subject to an authoritarian government like the People’s Republic of China, where there is no independent judiciary or the rule of law,” a spokesman for the US embassy in Berlin told the Handelsblatt. The protection of the telecommunications network must have top priority. Otherwise government agencies, companies and citizens would be endangered.

graphic

The well-connected telecommunications consultant John Strand even rated the planned decision in Germany as a success for Huawei. The company now has better market access in Germany than many German companies in China, said Strand. In contrast to other countries, there is no network operator in Germany who does not rely on Huawei as a supplier.

This means that companies in Germany would have no choice but to rely on a provider without Chinese equipment in their telecommunications network, warned Strand. “If I were the CEO of a German company, I would be concerned about the security of my data,” said Strand.

Martin Schallbruch, IT security expert at the ESMT University, criticized the fact that the draft law did not clarify the core issue of dealing with Huawei. Even if Huawei passes the technical test, a ministry could later register a political reservation. A final judgment is still pending. “The uncertainty persists, the use of Huawei will become more difficult, the providers will increasingly move away from Huawei,” said Schallbruch, summarizing the draft.

The China reporter for the SPD parliamentary group in the Bundestag, Metin Hakverdi, was “glad that the Chancellery and the Ministry of Economics have finally moved after months of resistance”. He announced: “Of course we will look very closely at the procedure for determining political reliability in the parliamentary legislative process.”

The USA, Australia and several European countries, including France and Great Britain, have therefore excluded Huawei from expanding the network. Most recently, Sweden also decided to ban Huawei, the decision is now a concern of the Swedish judiciary.

More: Government makes it difficult for Huawei to access the 5G network.

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6 tech stocks analysts recommend

New York, Frankfurt Facebook, Amazon, Apple, Netflix, Google: the names, abbreviated as FAANG, dominated the stock market during the corona pandemic. But the hope of an end to the global epidemic leads to rethinking. Experts are now recommending tech titles that have not been in the foreground before and therefore still offer good course opportunities. These include names as diverse as AMD, T-Mobile US, and Intuitive Surgical.

“The rotation from FAANG shares is overdue,” says Dan Morgan, portfolio manager at US asset manager Synovus. Too many investors would have spent too long on a handful of stocks. “Now they have recognized that there are many other good alternatives in the tech area,” says Morgan, referring to the chip manufacturer Nvidia and the software providers Salesforce and Adobe.

“At the beginning of the pandemic, many tech companies were concerned that IT budgets could be cut during the crisis. However, that wasn’t the case, ”says Morgan. That gave the industry a further boost on the stock market. A closer look at six candidates that are interesting right now.

T-Mobile share: US business benefits from more customers

Almost half of the Deutsche Telekom subsidiary listed in the USA is in free float. According to the news service Reuters, the company has a market capitalization of a good 160 billion dollars, well above that of the parent company with a good 70 billion euros. In April, after a lengthy process, T-Mobile merged with its competitor Sprint, making it the third largest wireless operator in the United States.

T-Mobile and Sprint are good examples of telecommunications companies in a market that has consolidated ”, praises the asset manager DNB Asset Management, a subsidiary of the largest Norwegian bank DNB, in a study entitled“ It doesn’t always have to be big tech ” . The ratio of price to earnings per share (P / E) based on the estimate for 2021 is a proud 46, according to Reuters news service.

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Sweden excludes Chinese from 5G expansion

Huawei billboard in Beijing

The use of Chinese equipment in mobile communications is currently being critically examined in a number of countries in Europe.

(Photo: dpa)

Düsseldorf Business for the Chinese network supplier Huawei is becoming more and more difficult in Europe. After Great Britain and France, Sweden has now effectively excluded the company from expanding the new 5G mobile communications standard.

The Swedish Post and Telecommunications Authority (PTS) announced on Tuesday that in addition to Huawei, the Chinese network supplier ZTE would also be locked out of the 5G expansion. The reason for the step was an assessment by the Swedish army and Swedish security services.

The use of Chinese equipment in mobile communications is currently being critically examined in a number of countries in Europe. At the beginning of the year, Sweden implemented a new rule that stipulates that network equipment providers must first be checked by the army and security authorities before they can be used.

As a result, Huawei and ZTE have now been excluded from the network expansion. Components that have already been installed must be removed from the network by January 1, 2025 at the latest, PTS said. The domestic telecommunications equipment supplier Ericsson and the Finnish operator Nokia are likely to benefit from the ban.

A Huawei spokeswoman said on request: “There is no objective reason for the claim that Huawei represents a security threat. We consider Huawei’s exclusion based on an unfounded suspicion to be unfair and unacceptable.” ZTE’s reaction to the decision in Sweden was initially still out.

In Sweden, the frequencies in the range of 3.5 gigahertz that are important for 5G mobile communications will be auctioned from November 10th. The four companies Hi3G Access, Net4Mobility, Telia Sverige and Teracom will take part in the auction.

A final decision is still pending in Germany

Sweden’s approach is also very relevant for Germany. A final decision on the use of Huawei and ZTE is still pending in Germany. Planned rules already provide that outfitters have to undergo a safety check – similar to what has already happened in Sweden.

The US had mainly accused Huawei of acting as a gateway for Chinese espionage and sabotage and imposed sanctions on the company. Huawei had always denied the allegations and stressed that evidence of the allegation was never publicly presented.

Beijing is preparing for possible retaliation. According to a report by the state news agency Xinhua, the Chinese government has passed a new law in order to impose import restrictions on companies in other countries. Whether this could also mean the Swedish network supplier Ericsson was initially open. Ericsson has been supplying equipment for Chinese cellular networks for many years.

More: Belgium does without Huawei in the 5G expansion – and relies on Nokia

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Growing Huawei veto clears the way for Nokia and Ericsson in 5G

(EFE) .- The growing veto by Western countries to the Chinese company Huawei, which the United States accuses of spying for Beijing, is clearing the way for the Nordic manufacturers Nokia and Ericsson towards global hegemony in the telephone market fifth generation mobile (5G).

Given the infinite applications and business opportunities it offers, 5G technology has become a strategic issue at a global level, and its security and reliability, one of the highest priorities of governments.

In addition, it is a succulent market. According to a recent study by Nokia, 5G technology has the potential to contribute eight trillion dollars to the global economy by 2030, in areas such as industrial automation, the IoT (internet of things) or driverless vehicles.

Huawei currently occupies the world leadership in the 5G networks sector, with a share between 35 and 40%, well above Ericsson (20-25%) and nearly double that of Nokia (15-20%), according to data from the consulting firm Dell’Oro.

Therefore, the great beneficiaries of the western veto to Huawei are the other two manufacturers capable of providing complete 5G equipment and services – the Nordic Ericsson and Nokia – which are taking most of the new 5G network tenders globally outside of China.

According to a recent Nokia study, 5G technology has the potential to bring eight trillion dollars to the global economy by 2030, in areas such as industrial automation.

The last country to join this veto has been Sweden, the headquarters of Ericsson, whose authorities decided last Tuesday to prohibit Chinese companies Huawei and ZTE from accessing contracts for the deployment of 5G technology, claiming they could damage national security.

Sweden is thus following the path taken by the US, whose president, Donald Trump, decreed last year a ban on US companies from using 5G technology from Chinese providers for security reasons and called on the European Union (EU) and other countries that do the same.

Both the Chinese authorities and Huawei have repeatedly denied the US accusations and have asked companies and governments not to exclude Chinese manufacturers from the deployment of 5G networks for what they consider political reasons.

However, to date, countries such as Australia, Canada, Great Britain, Slovenia and Japan have already joined the US blockade – in addition to Sweden, either for strategic reasons or due to pressure – and even threats – from the Trump government.

Other countries do not dare to veto Huawei directly for diplomatic reasons and for fear of possible reprisals from the Chinese government, although they are advising their telecommunications operators not to buy 5G equipment from Chinese manufacturers.

To date, countries such as Australia, Canada, Great Britain, Slovenia and Japan have already joined the US blockade, in addition to Sweden, either for strategic reasons or due to pressure from the Trump government.

This is the case of France, where the director general of the National Information Systems Security Agency (Anssi), Guillaume Poupard, assured last July that his country will strongly restrict – although without prohibiting altogether – the use of 5G networks Huawei for reasons of “sovereignty and independence”.

“We are seeing a snowball effect and there are many reasons why this is happening now. One of them is the geopolitical tension between the US and China, another that Huawei has become too important a player in the global market of networks “, explains to EFE Mikael Rautanen, analyst of the Inderes consultancy.

“Another important reason is that it is about the deployment of 5G, an infrastructure much more critical for countries than 4G, as vital as water and electricity,” adds Rautanen.

Operators’ fear of losing their licenses in the future if their governments decide that Huawei’s 5G networks may pose a risk to national security is leading many of them to “voluntarily” exclude the Chinese manufacturer from their plans. deployment of 5G.

A good example of this is the Spanish telecom Telefónica, which last month left Huawei out of its expansion plans for 5G networks in Spain, betting exclusively on Nokia and Ericsson, despite the fact that the Spanish Executive has not officially spoken about the possible risk of using Chinese equipment.

Months before, Telefónica had already announced its intention to “progressively” reduce Huawei’s presence in the core of its 5G network, until it was completely eliminated by 2024, a measure similar to that announced by Vodafone for its entire 5G network in Europe. .

The operators also see that there is a political risk when buying equipment from Huawei. That simple risk is enough for customers to buy from Ericsson or Nokia.

“Operators also see that there is a political risk when buying equipment from Huawei. That simple risk is enough for customers to buy from Ericsson or Nokia even in those countries where there are currently no restrictions on Huawei,” says Rautanen.

At the same time, teleoperators must ensure the competitiveness and functionality of their 5G networks, if possible diversifying their investments so as not to depend on a single provider and become vulnerable.

“In the short and medium term, the Huawei veto is positive for Nordic suppliers, but in the long term it is difficult to say what will happen. The operators do not want to see a duopoly of Nokia and Ericsson, so there will be demand for alternatives and that will bring new competition, “predicts Rautanen.

The South Korean giant Samsung is emerging as the main rival of the Nordic manufacturers in the global 5G market, since it has managed to place its share between 10 and 15%, according to Dell’Oro, although at the moment it does not have the same capacity as Nokia and Ericsson to offer 5G equipment compatible with 3G and 4G technologies.

It remains to be seen what the Chinese government’s response will be if the Huawei veto extends to Europe and America, but for now it cannot be ruled out that it ends up causing a large-scale trade war.

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Dax & dates in the daily stock market report

Düsseldorf Investors are concerned about the infection rate at home and abroad, which has now gotten out of control. Fear of large-scale new lockdowns is increasing, and further economic setbacks threaten. The German share index and the Euro Stoxx 50 fell further on Tuesday. The Dax closed at 12,736 points at the close of trading. Today, Wednesday, the leading German index was slightly up at 12,792 points.

Will encouraging company balance sheets prevent price losses in Wednesday’s trading session? Ulrich Stephan, chief investment strategist for private and corporate customers at Deutsche Bank, says that the current balance sheet season has the potential to give the stock markets a tailwind. The market expectations are so low that it should be easy for many companies to exceed them.

In Switzerland Nestlé today publishes figures for the first nine months of fiscal 2020. The corona crisis had already slowed the growth of the world’s largest food manufacturer in the second quarter. In Sweden the telecommunications equipment supplier Ericsson presents its figures for the third quarter of the financial year. With earnings of 4.5 billion Swedish kronor (around 430 million euros), the group had recently significantly exceeded analyst estimates.

In the Netherlands reports Akzo Nobel financial results. In the months from April to June, the result of the manufacturer of paints and specialty chemicals fell significantly. In Germany Darmstadt-based Software AG currently has to cope with the consequences of a hacker attack. For this reason, only central data for the third quarter just ended will initially be reported.

Also in the USA the reporting season continues: The US wireless operator Verizon reports on the third quarter. Sales had fallen in the previous three-month period by a good five percent to 30.5 billion dollars compared to the previous year. In addition, Adena Friedman, head of Nasdaq, announces the figures for the third quarter. In the previous three-month period, the exchange operator was able to exceed market expectations.

What is also important for investors today:

1 – Trade in the United States

Wall Street bounced back from its weak start to the week on Tuesday after a nervous trade. The Dow Jones Industrial closed 0.4 percent higher at 28,308 points. At the beginning of the week, the US benchmark index slipped 1.4 percent into the red. The market-wide S&P 500 gained 0.5 percent on Tuesday to 3443 points. The technology-heavy selection index Nasdaq 100 rose 0.4 percent to 11,677 points.

According to a representative of the Federal Reserve, the US economy will be less affected by a second wave of infections than initially assumed. “It looks like we’re going to fight our way through there, no matter how dire the consequences for households and families across the country,” says the head of the Fed branch in Chicago, Charles Evans.

2 – trade in Asia

On Wednesday, Asian investors reacted differently to renewed hopes for a US economic stimulus package: the Tokyo stock exchange was initially stronger, Shanghai slipped. “It’s going to be a pretty mixed day,” said Ryan Felsman, CommSec senior economist. “People are rethinking the opportunities for a US stimulus package and the markets are very cautious about that.”

The Nikkei index, which comprises 225 values, was 0.5 percent higher at 23,677 points. The broader Topix index rose 0.8 percent to stand at 1638 points. The Shanghai stock exchange was 0.4 percent in the red. The index of the most important companies in Shanghai and Shenzen lost 0.4 percent. The MSCI index for Asian stocks outside of Japan rose 0.3 percent.

3 – Motion of censure against Spain’s head of government

In the midst of the corona crisis, Spain’s parliament will deal with a motion of no confidence by the right-wing populist Vox party against the left-wing Prime Minister Pedro Sánchez from Wednesday. Vox boss Santiago Abiscal takes positions similar to other right-wing nationalist parties in Europe and accuses the government, among other things, of a “criminal” corona policy.

The conservative Partido Popular (PP) as the largest opposition party is in a dilemma. If it abstains, it could cost it to vote in the political center. If she votes against the motion of no confidence, then even more former PP voters could migrate to Vox.

More on the subject:

4 – US Aid Package Negotiations

Will there be movement in the dispute over the US aid package? Two weeks before the US presidential election, incumbent Donald Trump is giving a new twist to the discussion about further stimulus measures in the pandemic. Trump told Fox News that he would approve sums in excess of the $ 2.2 trillion demanded by opposition Democrats, even against opposition from his Republican party friends.

His government originally proposed $ 1.8 trillion. Trump’s Republicans in the Senate are reluctant to spend on this scale. The Democrats, on the other hand, think 2.2 trillion is appropriate. Treasury Secretary Steven Mnuchin and the US House Chairwoman, Democrat Nancy Pelosi, are negotiating an agreement.

The US Presidential Office and Congress are under increasing pressure to provide further aid for the economy, which is badly affected by the pandemic. The stimulus package currently under discussion would add $ 3 trillion in corona aid that Congress approved earlier this year.

5 – Google share under surveillance

In the middle of the presidential election campaign, the Internet giant Google is facing the biggest competition in more than 20 years. The Justice Department and eleven states sued the world’s largest search engine operator on charges that it was abusing its dominant position.

The subsidiary of the Internet company Alphabet is accused of penalizing competitors in search results and in the advertising business. Google’s anti-competitive behavior must be stopped by a court of law and competition restored, the lawsuit said. When asked what action should be taken, a US Justice Department representative said on Tuesday that no option was ruled out. Google denied the allegations.

6 – New strategy from Hannover Re

The new Hannover Re CEO Jean-Jacques Henchoz presented his future strategic plan to investors on Wednesday. He spoke to Handelsblatt in advance about what should change and where the MDax company is growing despite the corona crisis.

The wave of corona infections has hit the reinsurance industry massively: for example, by canceling pop concerts or sports events such as the Olympic Games, but also by protecting against temporary factory closures. Earlier than expected, competitor Munich Re informed about business in the third quarter on Tuesday. The net profit was around 200 million euros and thus less than a quarter of the previous year’s level of 865 million euros, as the group announced.

7 – VW is apparently exploring interest in its Ducati motorcycle brand

According to insiders, Volkswagen is talking to potential bidders about its Ducati motorcycle brand. The group wants to sound out before its planning round in November whether there is interest in the brand, said people who are familiar with the events, the Reuters news agency.

The five-year plan is also about the future of the sports car brands Lamborghini and Bugatti. It is still unclear whether a sale of Ducati will actually be decided at the meeting. In order for a sale to be possible in early 2021, investors and banks would have to sound out price expectations and strategies.

Future planning for Ducati, Lamborghini and Bugatti could therefore also result in technology partnerships, restructuring and other options, including an IPO or a sale. Volkswagen declined to comment.

8 – Netflix gets to feel the competition

Netflix is ​​feeling the competition from other streaming services. The company won fewer new customers in the third quarter than experts expected: In the months of July to September, 2.2 million paying subscribers were added, the group announced on Tuesday after the US market closed.

According to Refinitiv data, analysts had expected an average of 3.4 million new customers. Revenue rose nearly 23 percent year-on-year to $ 6.44 billion, while net income rose nearly 19 percent to $ 790 million.

Interest in Netflix initially increased sharply during the corona pandemic. The company itself attributed the now disappointing figures to the fact that there had already been an increase of more than ten million customers in the previous quarter. But Hollywood studios like Disney and Warner Media are also increasingly vying for video service customers. Even with sports programs, more and more competitors are competing against Netflix. Netflix shares lost almost six percent after the hours.

9 – Speculation about takeover spurs Bilfinger

With a price increase of a good eight percent, the shares of Bilfinger took the lead in the SDax before the trading session. Brokers refer to a media report, according to which several financial investors are interested in the Mannheim construction company. The American investment company Clayton Dubilier & Rice is one of the interested parties, it said. According to the information, the considerations are at an early stage. There is no certainty that a deal will come about. On the one hand, affordable financing must be obtained, it said. Another topic is the business risks related to the corona-related economic downturn and Bilfinger’s involvement in the oil and gas sector. Bilfinger and CD&R spokespersons declined to comment.

Company appointments on October 21

  • 7 a.m., Germany, software, Q3 figures (call 9.30 a.m.)
  • 7 a.m., Netherlands, Akzo Nobel, Q3 figures
  • 7 a.m., Sweden, Ericsson, Q3 figures
  • 7:15 a.m., Switzerland, Nestlé, nine-month sales (call 2:00 p.m.)
  • 7.15 a.m., Netherlands, Randstad, Q3 figures
  • 8:15 am, Spain, Iberdrola, nine-month numbers
  • 9 a.m., Norway, Telenor, Q3 numbers
  • 9 a.m., Germany, Cempleo Charging Solutions, Prime Standard initial listing
  • 1 p.m., USA, Nasdaq, Q3 numbers
  • 1 p.m., Great Britain, Manchester United, Q4 numbers
  • 1:30 p.m., USA, Abbott Laboratories, Q3 numbers
  • 1:30 p.m., USA, Verizon Communications, Q3 numbers
  • 10:25 p.m., USA: Tesla, Q3 figures

Company appointments on October 21st without a time

  • Germany: Hannover Re, 23rd Investor Day (online)
  • Denmark: Novozymes, Q3 figures
  • Sweden: Svenska Handelsbanken, Q3 figures
  • Sweden: Telia Company AB, Q3 figures
  • Norway: Storebrand, Q3 figures
  • USA: Whirlpool, Q3 numbers
  • USA: Xilinx, Q2 numbers
  • USA: Align Technology, Q3 figures
  • USA: Lam Research, Q1 figures
  • USA: Biogen, Q3 numbers

Dates for economic data on October 21

  • 8 a.m., UK: consumer prices 9/20
  • 10 a.m., Poland: Retail sales 09/20
  • 4 p.m., USA: Speech by Cleveland Fed President Loretta Mester
  • 4:30 p.m., USA: EIA oil report (week)
  • 6 p.m. USA: Speech by Minneapolis Fed President Neel Kashkari
  • 6 p.m. USA: Speech by Dallas Fed President Robert Kaplan
  • 8 p.m. USA: Fed, Beige Book

With agency material.

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What is at stake for Germany through 5G

THEb in the home office, for digital teaching or to control robots in factories: digitization is based on reliable and powerful communication networks. The new 5G mobile communications standard is a huge step in this direction. While the predecessors 2G, 3G and 4G only covered the consumer sector, 5G also supports the control of machines – even for mobile units. In addition to industry, it is about mobility, agriculture, construction, and even the energy sector will not be able to efficiently manage its future networks, the so-called smart grids, without 5G. 5G enables the Internet of Things in real time.

The previous mobile communications standards focused on ever higher data rates in order to be able to offer streaming services such as Netflix with 4K videos. 5G, on the other hand, supports reading and controlling millions of sensors with very low so-called latencies, i.e. delays caused by the communication network. Incidentally, this also allows people and machines to work collaboratively in the same place. 5G mobile radio systems are therefore currently being set up at full speed. The development behind it is not yet complete.

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Huawei regular customer Proximus chooses Ericsson for 5G core network in Belgium

The largest Belgian mobile operator Proximus wants to build its 5G core network with the Swedish network equipment supplier Ericsson. Both companies announced this on Friday in Brussels. In recent years, the former mobile communications division of the former state-owned company Belgacom relied primarily on technology from the Chinese 5G provider Huawei to expand its network. Huawei in particular is suspected by the US of cooperating too closely with the Chinese Communist Party.



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Proximus manager Geert Standaert said the decision to work with Ericsson was an important step in implementing the network strategy. The cloud solution will also be used to renew the existing 4G network (LTE).

The decision in Belgium was preceded by long discussions about possible additional costs when switching to a new supplier. The network operators in Germany are also leading a similar debate.

In the technically complicated market for the new 5G mobile communications standard, which requires billions to be invested in research and development, there are only a comparatively few providers worldwide. In addition to the Chinese groups Huawei and ZTE, these are above all Ericsson and Nokia from Scandinavia and Samsung from South Korea. US providers such as Cisco and Aruba Networks (Hewlett Packard Enterprise) only play a role in marginal areas.

The US government in particular has political reservations about the suppliers from China. President Donald Trump’s administration alleges that Huawei is inappropriately close to the Chinese government and has raised security concerns. Under pressure from the USA, Great Britain has also decided to forego 5G equipment from Huawei, although this entails high additional costs for expanding the 5G network. 5G creates the basis, among other things, for the networking of machines in industry and of intelligent devices as well as for digitization in many areas of life.

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USA vs. Huawei and no end in sight – what does that mean for us?

The Belgian telecommunications group Belgacom was at the center of an espionage affair in 2013. At the time, a publication by US whistleblower Edward Snowden suggested that the British secret service GCHQ had penetrated Belgacom’s computer network with a cyber attack in 2011. Belgacom stated at the time that the attack had had limited success. In the materials published by Snowden, however, it was said that the GCHQ, with the help of the US secret service NSA, was able to penetrate deep into the network and thereby gain access to the data streams of Belgacom customers.


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Germany is losing its good position

Dusseldorf The US is still top, but China is conquering one industry after another. This is at the expense of Germany: this is the common denominator of the result of an extensive study by the Bertelsmann Foundation on the development, size and strength of national patents in Asia, America and Europe. The results available to the Handelsblatt show that the international balance of power with regard to intellectual property and the innovation potential of companies and economies is shifting – and increasingly to the disadvantage of Europe.

It is undisputed that investments, innovations and patents are a central basis for the progress and international competitiveness of companies and economies. This applies particularly to new developments in important future technologies such as 3D printing, 5G, artificial intelligence or energy conversion. It is disputed how such innovations and potential can be measured. One of the most common methods is to identify successful patent applications in every country and in different industries – and to create a ranking from them.

The big disadvantage: mass often beats class, because patents can be successfully registered for almost every invention, regardless of whether they are subsequently used or used profitably. Together with the Swiss economic research and consulting institute Econ Sight, the scientists at the Bertelsmann Foundation have therefore focused on particularly important patents in 58 future technologies, the so-called world-class patents.

These world-class patents are only about the top ten percent of patents from important technology groups, which have been cited particularly often in patent applications and which have also been registered in many markets. Only they really promise success.

East Asia’s catching up is remarkable when it comes to high-quality patents. The days when Chinese scientists filed hundreds of thousands of patents in their own country to break records without actually doing innovative research themselves are over.

Even though the United States is still the undisputed leader in most future technologies, South Korea and especially China have made an enormous leap forward in recent years: in 2019, China ranked among the three countries with the most top patents in 42 of the 58 technologies examined. The People’s Republic is already a leader in areas such as nutrition and the environment. In 2010, the country was not among the top three in one technology, not even in the top five in 2000.

China has not only caught up in the most important environmental technologies, it has even left the once leading USA behind. The country holds a good quarter of world-class patents when it comes to recycling, with the United States behind it with a good 21 percent. China has won a patent share of 36 percent in water treatment and also leaves the United States behind with 22 percent.

Since 2010, the number of Chinese world-class patents has increased significantly, in some cases over 50 percent, on an annual average. Similar steep successes can be found in most other technologies. The country holds a share of 33.5 percent in blockchain technology, which is just behind the United States with 35.6 percent.

China relocates workbench to Germany

The fact that companies in China place so much emphasis on research and development is also due to the early cooperation with German companies. For example, the Chinese battery manufacturer CATL produced batteries for a joint venture between the Chinese carmaker Brilliance and the German BMW Group in 2012 and was forced to ensure the high quality standards through continuous controls.

Today, a fifth of the Group’s workforce works in research and development. CATL is currently establishing its first European location in Thuringia in order to produce batteries close to German customers from the beginning of 2022.

Here the circle closes: China is no longer the “workbench of the world”, but a Chinese company is relocating one of its workbenches to Germany – with technology that Germany and Europe have lost touch with.

The rise of China is at the expense of continental Europe. No country has the most world-class patents in any of the 58 technologies considered. After all, for the European Union as a whole it is enough for two top positions: in the technologies wind power and functional food. Food is enriched with health-promoting ingredients.

Large food groups such as Nestlé and Danone are particularly active here. Former Fresenius and current Nestlé boss Ulf Schneider is increasingly trimming the Swiss group towards healthy eating, also because higher margins can be achieved here.

Germany remains the strongest European patent power, has a broad base and is doing well in terms of population. But the claim to be a leading technology nation is under increasing pressure.

Mechanical engineering and the automotive industry, for example, are currently putting massive brakes on investments. Hubert Barth, Germany chief EY

The corona pandemic, which has stalled in large parts of the manufacturing economy for several months, is likely to exacerbate the threatening situation. “Mechanical engineering and the automotive industry, for example, are currently putting huge brakes on investments,” observes Hubert Barth, Germany chief of the auditing firm EY.

In 2010, Germany was still one of the three nations with the most world-class patents in 47 of the 58 technologies, in 2019 this share more than halved to 22 technologies. This development also and especially affects Germany’s traditionally strong areas of industry and mobility.

The authors of the study believe that two reasons are essentially responsible for Germany’s weakness. On the one hand, the Chinese leadership decided on the “Made in China 2025” innovation project in 2015. What might have been lip service in the European Community with the different interests of 27 nations can easily be implemented in a one-party country without elections.

It is about an ambitious plan that is subsidized with 270 billion euros. The communist party wants to bring the country to the top of the world through targeted research and development in key economic sectors such as aircraft construction, electromobility or chip production.

On the other hand, in countries like the USA, networking and research cooperation between universities and large companies works better and more pragmatically – without the fear of contact that still prevails in Germany between educational institutions and the private sector.

Germany has the second most vaccine patents

But the patent study also reveals positive things for Germany, especially against the background of the corona crisis: a high level of innovation in the health sector. Germany is the country with the second most world-class patents in important vaccine technology. Ten percent of all world-class patents in this area come from Germany. In addition to vaccines, Germany has outstanding expertise in disease research and precision medicine.

Germany’s best technology by far is wind power. It holds over 21.2 percent of world-class patents, or 958 in absolute numbers, almost as many as the USA leader, which has 991. The outstanding company is Enercon from Aurich. Germany is also well positioned in 3D printing with 15 percent of all outstanding patents.

However, many weaknesses such as digitalization reveal major weaknesses, as a look at the details shows. Traditional and once strong branches such as mobility and industry are also coming under pressure.

“Europe needs a clear political commitment for a common initiative,” says Brigitte Mohn, board member of the Bertelsmann Foundation. The competition does not take place within the European countries or their respective organizations, but comes from Asia and the USA.

Against this background, Mohn believes that a pan-European innovation platform surrounded by a transnational ecosystem that is supported by government budgets and financial incentive systems is necessary. That would be “a clear sign to take innovation seriously as the basis for the future viability and sustainability of European economies and societies in their countries,” said Mohn.

The reason for such a paradigm shift could be the deep cut caused by the corona pandemic. This now offers the opportunity to review and adjust social priorities. For example, by directing billion-dollar economic stimulus programs, as many nation states and the European Union are currently adopting them, to promote future technologies such as climate protection and digitalization. “A new scrappage bonus is certainly not the best way to do this,” says study author Thomas Rausch.

A closer look reveals: Germany is disappointing in many industries, but not everywhere. There are also positive surprises:

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