Tuesday Tech Briefing: Huawei, Tencent, Microsoft

BIG TECH COMPANIES

1. India, Huawei Send Mixed Signals on 5G

What: Telecom equipment giant Huawei Technologies Co. Ltd. said on Monday its role in the development of 5G communications in India is proceeding “normally,” despite the Economic Times of India citing the country’s Department of Telecommunications Secretary Aruna Sundararajan last Friday saying that Huawei and ZTE had been excluded from the country’s 5G trials.

Why it’s important: Huawei’s comments came as the company’s core networking equipment has been frozen out of the U.S. and Australia for 5G, the next-generation standard that will soon start to replace current 4G networks. The U.S. has informally banned equipment from Huawei and rival ZTE Corp. for years over security concerns, while last month Australia also banned the pair from participating in 5G network construction.

Big picture: Washington and Canberra worry about Huawei’s possible ties to Beijing, in part due to company founder Ren Zhengfei’s background as a former engineer with the People’s Liberation Army, though Huawei has denied any such ties. Huawei has long been active in the Indian telecom market, and has set up manufacturing facilities there. But foreign media began reporting as early as this April that the Indian government was preparing to ban equipment from China over network security concerns. (Source: Caixin)

2. Tencent, Hillhouse Team Up to Help Manage China's Offshore Trillions

What: “Tencent Holdings Ltd. and Hillhouse Capital Management Ltd. are joining the throng of financial firms seeking to service the huge number of Chinese investors looking to diversify outside the mainland. GaoTeng Global Asset Management Ltd., the duo’s 1-year-old venture in Hong Kong, plans to start accepting money shortly from retail Chinese investors who have existing assets internationally, according to an emailed statement that didn’t provide an exact time frame,” Bloomberg reports. GaoTeng has received asset management and securities advisory licenses in H.K., and its first product will be a fixed-income fund that will be open to individual investors in the city.

Big picture: “A weakening yuan amid escalating global trade tensions and domestic credit tightening is likely to spur Chinese interest in diversifying holdings outside the world’s second largest economy. China’s currency has depreciated 5.1% against the dollar this year while the benchmark Shanghai Stock Exchange Composite Index is down almost 19% in local-currency terms, making it the worst-performing primary share gauge tracked by Bloomberg.” (Source: Bloomberg)

3. Microsoft Plans Shanghai Research House

What: “Microsoft Corp plans to set up an arm of its Asian research house in Shanghai this year, fueling the city’s ambition for a digital upgrade and new artificial intelligence talent. The announcement was made by Harry Shum, Microsoft’s executive vice president, during the 2018 World Artificial Intelligence Conference on Monday,” China Daily reports.

Why it’s important: “The Shanghai establishment marks an R&D extension, after the tech giant established its fundamental research body, the Microsoft Research Asia, in Beijing two decades ago.” (Source: China Daily)

PRODUCTS

4. Alibaba’s Taobao Launches Stand-Alone Short Video App to Drive E-commerce

What: “Alibaba Group Holding’s Taobao is making a move into short video, launching its own stand-alone app aimed at letting users show off their goods to each other on the consumer-to-consumer platform. The app – called ‘Lu Ke’ in Mandarin (which plays on the English word ‘look’) – was officially available on app stores last week. The short video app lets users upload videos in different categories, such as travel, food and even beauty, and includes a question and answer section where users can answer questions submitted by viewers,” the SCMP reports.

Why it’s important: “Taobao’s Lu Ke app comes amid an explosion in popularity for short video apps in China, with apps like Douyin (also known as Tik Tok internationally) and Tencent-backed Kuaishou topping download charts both at home and in overseas markets. Companies such as Tencent and Baidu have also jumped on the bandwagon, launching their own versions of short video apps called Weishi and Nani respectively,” the SCMP reports.

Big picture: “The number of monthly active users for short video apps in China doubled in 2017, from 203 million at the beginning of the year to 414 million by year end.” (Source: SCMP)

POLICY

5. Chinese Firms are Aggressive Investors in AI and Show a ‘Thirst for Talent’, Says MIT-BCG Report

What: “Chinese companies are ‘aggressively investing’ in artificial intelligence (AI) applications and show more thirst for talent, a joint study by Massachusetts Institute of Technology (MIT) and Boston Consulting Group (BCG) shows,” the SCMP reports. “The study finds that Chinese AI pioneers invest more aggressively, put greater focus on business model transformation, and are particularly good at ‘centralizing the housing and governance of data for their AI engines’, compared to European and U.S. peers.”

Big picture: “Betting big on the core technology behind an array of cutting-edge applications from autonomous driving to facial recognition, China’s State Council last July laid out a three-step road map to AI supremacy. It included the goals of building a domestic AI industry worth about US$150 billion and to make the country an ‘innovation center for AI’ by 2030. China’s AI ambitions have captured the attention of U.S. President Donald Trump in his escalating trade spat with the country.” (Source: SCMP)

6. China Urges AI Elites to Unite in ‘Global Village’ despite Background of US-China Trade War

What: Chinese Vice Premier Liu He urged major AI players to look beyond traditional national borders at the World Artificial Intelligence Conference in Shanghai on Monday.

Why it’s important: “Liu’s conciliatory speech was delivered amid a mounting U.S.-China trade war and heated rhetoric from China-wary U.S. President Donald Trump,” the SCMP reports.

Big picture: “China is developing AI in an ‘open environment’ and encourages companies across the world to actively get involved in the ‘immense market’ and form intensive collaborations at the corporate and research institute level,” according to Mr. Liu. “China is already attracting 70 per cent of the US$39.5 billion raised worldwide for AI investments.” (Source: SCMP)

Compiled by Isabelle Li