Your Tuesday Tech Briefing

BIG TECH COMPANIES

1. Tencent Will Store Its Most Important Data in Guizhou: Chairman

WHAT:

•   Tencent Chairman Pony Ma said a company data center that will store its most important information has begun trial operation in southwest Guizhou province

•   He also advised Guizhou officials to provide good healthcare, quality education, and plenty of culture activities to attract and retain talent

WHY IT’S IMPORTANT:

•   A growing number of tech companies are taking advantage of Guizhou’s cooler temperatures and low electricity prices to build data centers in the province, one of China’s poorest

BIG PICTURE:

•   Ending poverty is a key agenda item of Chinese President Xi Jinping. Tech companies hope that by building data centers in Guizhou, they can gain political support

•   In 2017, Apple also announced it would build a data center in Guizhou to house its iCloud service for Chinese users. That center is now run by state-owned Guizhou-Cloud Big Data Industry Co. Ltd.

Source: Caixin (link in Chinese)

2. Chinese Smartphone Maker Xiaomi Stakes Its Future on Europe

WHAT:

•   Smartphone maker Xiaomi opened the first of what it says will be up to 10 Xiaomi-branded stores in Paris, and one in Milan last week

WHY IT’S IMPORTANT:

•   The move will test whether Xiaomi’s low-cost models are popular in affluent markets

•   Xiaomi is seeking a public offering in the next two months

BIG PICTURE:

•   Despite their rapid rise, most Chinese smartphone makers are still highly dependent on their home market. Xiaomi is one of the first to make serious inroads outside, mostly in developing markets

Source: The Wall Street Journal

3. Haier Apologizes After Falsely Claiming WHO Endorsement

WHAT:

•   Chinese home appliances giant Haier Electronics Group Co. Ltd. has apologized after incorrectly claiming that a World Health Organization (WHO) expert endorsed the company for its contribution to reducing indoor air pollution

•   The WHO sent out a statement denying the expert who attended Haier’s event was a “WHO expert” and rejected some claims made at the seminar

WHY IT’S IMPORTANT:

•   The incident is an embarrassment for Haier, one of China’s best-known consumer brands. Similar advertising campaigns are quite common among its rivals, as regulators seldom punish companies for such actions

Source: Caixin

DEALS AND FUNDRAISING

4. Tencent-Backed Electric Car Startup NIO Files for IPO

WHAT:

•   NIO, a Chinese electric-vehicle startup backed by Tencent and Baidu, has submitted an initial confidential IPO filing with the U.S. Securities and Exchange Commission

•   Sources said the share sale could raise around $2 billion and NIO plans to take orders for the offering as soon as this summer or early autumn

WHY IT’S IMPORTANT:

•   NIO, started in 2014, is widely regarded as China’s Tesla. Selling shares could give it more funds to expand quickly as it competes with dozens of other startups in the world’s biggest automobile market

BIG PICTURE:

•   China has produced a bumper crop of electric vehicle startups that are all trying to take advantage of Beijing’s strong incentives to promote clean energy driving. The next two years will be critical to determine who will succeed

Source: Bloomberg

5. China’s ‘Angry Birds’ Operator Files for IPO in Hong Kong

WHAT:

•   IDreamSky Technology Ltd. filed a preliminary IPO prospectus to the Hong Kong Stock Exchange, two years after it delisted from the Nasdaq

•   In 2014, iDreamSky raised $115.5 million in a U.S. listing, giving it a valuation of $615 million

WHY IT’S IMPORTANT:

•   Founded in 2011, iDreamSky says it is China’s largest mobile-game publisher, with monthly active users hitting nearly 125 million at the end of last year

•   The company is famous mostly for operating third-party games in China, such as “Angry Birds” and “Fruit Ninja”

BIG PICTURE:

•   The company was one of several dozen from China to privatize from New York during a wave of delistings that peaked in 2015, spurred by American investors’ lack of interest in the stocks

Source: Caixin

POLICIES:

6. Chinese President Xi Urges Striving for Scientific Self-reliance After ZTE Case Exposes Hi-Tech Gaps

WHAT:

•   Chinese President Xi Jinping said China will double down to make breakthroughs in core technologies, in a speech at the Chinese Academy of Sciences and Chinese Academy of Engineering

•   Xi said technological self-reliance was central to China, and self-determination and innovation is the unavoidable path

WHY IT’S IMPORTANT:

•   Xi’s words show that China will not give up on its “Made in China 2025” program, a strategy to move China up the industrial technology chain, despite Washington’s moves to limit technology transfers

BIG PICTURE:

•   The high-profile case involving U.S. sanctions against ZTE has exposed China’s heavy reliance on U.S. chips and China’s broader dependence on foreign technology

Source: South China Morning Post

Compiled by Zhang Erchi, Hou Qijiang and Qian Tong