Caixin
Nov 30, 2021 09:24 AM
CX DAILY

CX Daily: How Will New Data Security Rules Reshape China’s Internet Industry?

China’s new data security law will make marketing using facial recognition technology very difficult.
China’s new data security law will make marketing using facial recognition technology very difficult.

Data /

Cover Story: How will new data security rules reshape China’s internet industry?

A planned Hong Kong share sale by SenseTime Group Inc. is attracting close attention from investors looking for clues as to how Beijing’s new rules on cybersecurity will affect overseas listings by artificial intelligence companies and other data-intensive businesses.

An initial public offering (IPO) by SenseTime, China’s largest artificial intelligence (AI) company, won clearance at a Nov. 19 hearing of the Hong Kong Stock Exchange (HKEX). That was five days after Beijing issued new draft rules that share sales outside the Chinese mainland are subject to heightened scrutiny on exporting data that could affect national security.

It was also well before the broadened requirements might go into effect. An analyst at a major brokerage told Caixin that SenseTime was “decisive” in timing its IPO ahead of the proposed new rules.

Covid-19 /

China’s ‘zero-Covid’ strategy can protect country against omicron, top experts say

China’s “zero-Covid” strategy can deal with the new and potentially more contagious coronavirus variant omicron and prevent it from spreading across the nation, according to leading Chinese experts, as the virus triggered a new wave of travel restrictions in many other countries around the world.

The virus, which was first reported to the World Health Organization (WHO) by South Africa Wednesday, was detected around the world over the weekend, prompting Japan and Israel to ban all foreigners from entering their countries and many others to impose varying degrees of travel restrictions to keep it out.

Zhang Wenhong: China is equipped to deal with the omicron Covid variant

Quick response, speedy virus tracking help Shanghai quell flare-up, Zhang Wenhong says

Following Western-style Covid policies would cause ‘great disaster,’ Chinese researchers argue

FINANCE & ECONOMY

Alipay and WeChat Pay are key players in China's mobile payment sector. Photo: VCG

Payment /

China’s new mobile payment rules aim to crack down on cross-border gambling, central bank says

China’s central bank issued new regulations (link in Chinese) for the multitrillion-dollar payment sector in a bid to improve risk control and clamp down on crimes like cross-border gambling that illegally take advantage of payment barcodes to transfer funds.

If strictly enforced, the rules are expected to significantly impact the whole payment industry, especially key players Alipay and WeChat Pay, a senior executive of a payment company told Caixin. The two platforms, separately run by tech giants Ant Group Co. Ltd. and Tencent Holdings Ltd., collectively held more than 90% of the nonbank mobile payment market last year, according to internet consultancy iResearch.

One key rule introduced points to the popular payment collection barcodes, which can be divided into “individual” and “merchant” codes based on the classification of the generators.

Corruption /

Graft-busters ensnare another former securities regulator

Zhu Yi, general manager of the investment banking business at Guotai Junan Securities Co. Ltd., has been put under investigation on suspicion of serious violations of law, according to China’s top antigraft agency.

Zhu, 46, was a member of the main board public offering review committee of the China Securities and Regulatory Commission (CSRC) from May 2012 to September 2017, according to a statement (link in Chinese) released Friday by the Central Commission for Discipline Inspection (CCDI). In that post, Zhu served as one of the regulators responsible for approving IPOs on the main boards of the Shanghai and Shenzhen stock exchanges.

Yuan /

Opinion: Why yuan is likely to stay strong for a long time

“In 2021, the yuan has continued to appreciate against the U.S. dollar, with the exchange rate rising from nearly 7 per dollar at the beginning of the year to around 6.4 now, an increase of about 2%,” writes Xu Xiaoqing, director of macro strategy at DH Fund Management Co. Ltd., in an article.

“Even if the pandemic fully subsides, China’s share of global exports will not fall to pre-pandemic levels, which means the logic supporting long-term yuan strength remains valid,” writes Xu.

“China’s central bank has been cautious about easing monetary policy, while the U.S. Federal Reserve is hesitant about normalizing its loose monetary policy,” writes Xu. “So, short-term interest rates in the world’s two largest economies have not been adjusted in a timely manner in response to their economic fundamentals. After deducting core inflation, China’s real interest rates are relatively high, while those in the U.S. are too low, which have also supported the yuan.”

Quick hits /

China regains favor with investors who deem India overvalued

Editorial: Helping smaller enterprises before emergencies occur

BUSINESS & TECH

Weibo was launched in 2009 and began trading in the U.S. in April 2014. Photo: VCG

Weibo /

Weibo seeks $547 million in secondary offering in Hong Kong

Alibaba-backed Chinese social media company Weibo Corp. is seeking as much as HK$4.27 billion ($547 million) in a secondary listing in Hong Kong.

The Nasdaq-listed company is selling 11 million shares at up to HK$388 apiece, according to a term sheet filed to the Hong Kong Stock Exchange Monday. Final pricing will be announced Thursday and shares are set to start trading Dec. 8, the filing said, with an overallotment option allowing underwriters to buy a further 1.65 million shares that could be worth roughly HK$640 million.

Weibo’s Hong Kong share offer comes amid China’s increased regulatory tightening over the tech sector, particularly on content and data security, as well as U.S. regulators’ scrutiny of Chinese firms traded on U.S. exchanges.

Electric cars /

Tesla to expand production at Shanghai plant

Tesla Inc. plans to expand production at its Shanghai factory, adding workshops and workers as the company deepens its investment in the world’s largest electric car market.

The carmaker will build multiple new workshops for stamping, painting, automotive body production and final assembly, according to an environmental impact report (link in Chinese) published by the carmaker on a local government information disclosure platform.

China smartphone giant Xiaomi shifts gears with plan to build electric car factory

Evergrande /

Evergrande founder cuts stake to raise $344 million

Billionaire Hui Ka Yan sold 1.2 billion shares of China Evergrande Group for HK$2.68 billion ($344 million) as the property giant’s founder and chairman increasingly taps his personal wealth to help bail out the debt-laden company.

It was the first time Hui reduced his stake in the company since it went public in 2009, according to Bloomberg. Evergrande’s Hong Kong-traded shares plunged 10.39% Friday to close at HK$2.5 apiece. The stock has declined nearly 83% this year.

Quick hits /

Pinduoduo shares dip as earnings disappoint

China adds e-cigarettes to tobacco monopoly law

Meituan posts widest loss since 2018 as China headwinds grow

GALLERY

Shanghai nips Covid flare-up in the bud

Recommended newsletter for you /

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