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LATEST
SMIC Profits Soar to $138m in Second Quarter
Foldable Phone-Maker Plans Shenzhen IPO, Dispelling Rumors of U.S. Listing
Astra Inks Oxford Vaccine Production Deal with China’s Kangtai
Trending Story: Are Any New Graduates Really Worth 2 Million Yuan a Year? Netizens Discuss!
Trending in China: Popcorn or Cheaper Tickets - What Would Make You Return to the Cinema?
Tesla Challenger Xpeng Raises $400 Million Before Planned U.S. IPO
CATL Announces it Will Supply Batteries for Mercedes-Benz New Electric Sedan
TikTok Sees No Slowdown in Global Popularity Despite Indian Ban and U.S. Threats
Baidu Search, Sina Weibo on ‘Secret List’ of Chinese Apps Banned in India’s Latest Purge
Trending in China: Choosing a College Major - For Love or Money?
Evergrande Health Forges Ahead With Six New Electric Vehicles
Trending in China: How Cute Rabbit Ears Are On the Frontline in Fight Between Delivery Firms
Chinese Company Files Lawsuit Against Apple’s Siri for Patent Infringement Worth Billions
China Home to Six of the World’s Top 10 Unicorns, Hurun Report Says
Trending in China: Can Music Streamers Help Users’ Depression?
Core Parts of China’s Beidou Satellite System ‘100% Made in China’
Trending in China: Xiaomi CEO’s Shows How Best To Harness China’s Social Media Humor for Serious Business
Apple Takes Down Over 30,000 Apps from China Store Amid Government Crackdown
Chinese Chipmaker SMIC to Establish Joint Venture for Wafer Production
Microsoft Said Plan to Acquire TikTok Will Continue

By Ye Zhanqi and Lu Yutong / Aug 07, 2020 04:15 PM / Business & Tech

High-profile Semiconductor Manufacturing International Corp. saw its profits in the second quarter of the year spike more than six-fold to $138 million compared with the same period last year, according to a financial report filed to the Hong Kong Stock Exchange on Thursday.

Its revenue rose by 18.7% year-on-year to $938 million during the same period. SMIC attributed the growth to an increase of wafer shipments – which made up over 90% of its earnings between April to June.

The Chinese mainland and Hong Kong contributed 66.1% of SMIC’s income in the second quarter, while revenue from markets in the U.S. and Eurasia, excluding China, continue to decline to 21.6% and 12.3%, respectively.

SMIC also recorded a $40.5 million operating income which is recognized as government funding, though the amount was down 31.7% compared to the first quarter and 35% less than the same period last year.

The amount SMIC spent on research and development fell 13.3% from April to June, mainly due to a decrease in related activities, the report said.

Contact reporter Lu Yutong (yutonglu@caixin.com)

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By He Shujing and Anniek Bao / Aug 07, 2020 03:42 PM / Business & Tech

Photo: VCG

Photo: VCG

Chinese flexible screen pioneer Royole Corp. is eyeing a hometown IPO in Shenzhen, tapping Citic Securities for support.

The news means secret plans for a $1 billion U.S. listing reported earlier this year may have gone off the boil. The company has raised around $7 billion from investors including state-backed Shenzhen Capital Group, and its most recent funding round valued it at around $6 billion, Caixin understands.

The display maker has achieved a number of firsts in the niche market of foldable interfaces since it was founded in 2012, including what is regarded as the world’s first foldable smartphone.

The plan to go public comes as foldable displays shape up as a coveted next generation item even in the face of concerns about their hardiness and longevity, and despite caution from analysts that the already oversupplied flexible display market will make profits hard won.

The company claims to have planned production capacity of 50 million screens per year, but sources told Caixin that Royole only made 2.8 million last year. One analyst told Caixin that Royole shipped less than a million foldable smartphones shipped last year worldwide, and Huawei's flagship foldable phone the Mate X will only ship around 100,000 units.

Read the full story on Caixin Global later.

Contact editor Marcus Ryder (marcusryder@caixin.com)


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By Bloomberg / Aug 07, 2020 04:24 AM / Business & Tech

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picture

AstraZeneca Plc and China’s Shenzhen Kangtai Biological Products Co. entered a deal to produce the U.K. drugmaker’s promising Covid-19 vaccine, the latest in a flurry of global pacts aimed at fighting the pandemic.

Shenzhen Kangtai agreed to build capacity to make at least 100 million doses of the shot by year-end, and 200 million by the end of 2021, Astra said Thursday on its WeChat account. The companies will also look at working together on the jab — designed by scientists at the University of Oxford — for other markets.

Astra has already struck deals to supply hundreds of millions of doses of the experimental vaccine for the U.K., U.S. and Europe. The British drugmaker has said it will supply the shot at cost during the period of the pandemic, and hasn’t disclosed how much it will charge after. Astra has committed to starting delivery of 30 million vaccine doses to the U.K. by September.

Shenzhen Kangtai is one of China’s biggest vaccine makers, with shots against diseases such as pneumonia and measles. Many of its products employ more sophisticated techniques, including genetic engineering. It’s also a major supplier of hepatitis B vaccine.


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Heather Mowbray / Aug 06, 2020 07:23 PM / Trending Stories

What’s trending?

Envy and admiration abound for two young Chinese scientists who have emerged fresh out of college to land jobs worth millions at China’s best known telecom hardware manufacturer, Huawei.

What’s the story?

As graduates across China struggle to find a job in a reeling economy suffering the impact of coronavirus lockdowns and slowdowns, two talented Ph.D.s walked away from a grueling interview process with pay packages that exceed most young people’s wildest dreams. Zhang Ji graduated with a doctorate in computer science, and Yao Ting completed a doctorate in computer system architecture. Both are from Huazhong University of Science and Technology in Wuhan, and top winners of this year’s Huawei Talented Youth Program.

The program was started by Huawei’s founder and CEO Ren Zhengfei last year to attract graduates from China’s most prestigious science academies to take on the toughest challenges at the leading telecom company in exchange for impressive salaries, ranging from 900,000 ($30,000) to 2 million yuan ($288,000) a year. Huawei has plans to recruit more than 20 such scholars, including talent from overseas.

Zhang, 27, is the first to receive a salary of 2 million yuan from the program. He is an expert in artificial intelligence and intelligence system optimization and has published numerous papers while at university. Yao researched new storage media databases and key-value storage systems, and was a trainee senior researcher at Western Digital Research Institute in Japan.

The pair were subjected to seven rounds of vetting before securing the jobs. Zhang admitted that he had also received offers from Tencent, IBM, and Alibaba, as well as two start-ups, but turned them down for Huawei because the work matched his research direction. Fully aware that these were testing times for Huawei, Zhang said he wanted to “do something meaningful” and help the company persevere.

What are people saying online?

More than 12,000 comments have been posted under the main news on Weibo. Amid the congratulations, netizens asked why no graduates of Tsinghua were on the list. As one user points out, Huazhong receives 11 billion yuan ($1.6 billion) in subsidies from the government while the country’s top science academy Tsinghua receives more than double that. People also question why Huazhong graduates are so highly favored by the rich tech company, while acknowledging the university does rank in the top five in science.


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Yilin Chen / Aug 06, 2020 07:01 PM / Trending Stories

What’s trending?

Beijing will offer a total of 20 million yuan ($2.9 million) in subsidies to 232 movie theaters hit hard by the Covid-19 pandemic, authorities said Wednesday. The subsidies will favor small to mid-sized businesses with each cinema eligible for up to 500 thousand yuan, depending on box office takings in 2019. Authorities say they hope to boost the confidence of film industry professionals and raise revenues to pre-coronavirus levels as soon as possible.

What’s the story?

Although most of the nation’s cinemas were allowed to reopen on July 24 after a six-month closure, they had to follow numerous restrictions due to public health concerns, such as operating at below 30% capacity, banning food or drinks, and showing movies that last no more than two hours. In the first week of reopening, cinemas across the nation only brought in modest revenues of 109 million yuan ($15.6 million), roughly equal to a single day’s box office in the same period last year. Some cinemas have been selling tickets for as low as 1 yuan to attract patrons.

Beijing authorities have previously stepped in several times to support the film industry. In March, the Beijing Film Bureau distributed a series of subsidies to cinemas, especially those that opened in the past three years or made impressive box office revenues from Chinese titles. In June, the Municipal Bureau of Finance returned the special funds that cinemas paid to film authorities in 2020.

On top of the delay and cancelation of many domestic theatrical releases and film production, Hollywood films might also bring in less than expected in China. Postponed from March, Disney’s live-action remake of Mulan is finally set for release on September 4. It will be available on Disney+ for $29.99 and will be played in theaters in countries without Disney+, which ought to include China. However, many Chinese moviegoers have become weary following the delays and hesitant to watch the film amid mounting geopolitical tensions between the China and the U.S.

What are people saying online?

Beijing authorities’ plan is controversial news to China’s netizens. Many people have acknowledged the plight of Chinese cinemas and praised the authorities for helping them through this difficult time.

At the same time, some people argue that it might be good for smaller businesses to shut down or be acquired by larger cinemas in a cruel but necessary game of “survival of the fittest.” They believe the government should subsidize industries that are more vulnerable, such as restaurants and farmers, while helping the film industry by loosening public health limitations.

Contact editor Marcus Ryder (marcusryder@caixin.com)


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By Ding Yi / Aug 06, 2020 05:30 PM / Finance

Photo: VCG

Photo: VCG

Xpeng has launched a financing spree as the Chinese electric vehicle startup is reportedly preparing for a U.S. initial public offering (IPO).

The Guangzhou-based company, sometimes dubbed as a Tesla wannabe, has raised $400 million from a group of investors including Alibaba, Qatar Investment Authority and Mubadala, CNBC reported Wednesday, citing two sources with knowledge about the deal.

Xpeng’s new funding round comes just weeks after the company announced the $500 million investment from Aspex Management, Sequoia Capital China, Hillhouse Capital and Coatue Management.

In additional to private investment, Xpeng is also eyeing an IPO with media reports revealing that the company has confidentially filed for a listing in New York, but has yet to decide what bourse to list shares on.

In China, many new domestic players are hunting for more capital to finance their business expansion and technology development at a time when U.S. rival Tesla is gaining momentum in the world’s largest auto market by virtue of the popularity of its Shanghai-built Model 3 sedan.

The latest example is loss-making Li Auto, which last week became China’s second electric vehicle startup to go public in the U.S. after Nio’s $1 billion IPO on the New York Stock Exchange in 2018. Five-year-old Li Auto has seen its share price rise about 45% since its trading debut. In its previous stock filing, the company said that it would use the proceeds from the IPO to develop new products and manufacturing facilities.

Lesser-known Zhejiang-based Hozon Auto has also recently announced plans to list on Shanghai’s Nasdaq-style high-tech STAR Market by the end of 2021, irrespective of its lukewarm sales of 16,000 electric cars since its establishment in 2014.

Contact reporter Ding Yi (yiding@caixin.com)

Relate: Electric Carmaker Xpeng Shows Off New Factory


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By Zheng Lichun and Lu Yutong / Aug 06, 2020 04:01 PM / Business & Tech

Photo: VCG

Photo: VCG

Chinese electric vehicle battery maker Contemporary Amperex Technology Co., Ltd. (CATL) is going to supply batteries for the luxury electric vehicle developed by its partner Mercedes-Benz.

CATL, which reached a partnership with the German company in 2018, will supply batteries to fit the electric luxury sedan Mercedes-Benz EQS that are set to be delivered next year, according to a statement by the carmaker Wednesday.

The battery manufacturer is growing into an integral part of the global supply chain for electric vehicles. It partnered with Tesla in May to co-develop a low-cost, long-life battery for the Shanghai-built Model 3 sedan, and raised nearly 19.7 billion yuan ($2.8 billion) through a private share placement last month, with nearly a third of the total coming from Swiss financial titan UBS, American conglomerate JPMorgan Chase and Japanese vehicle brand Honda Motor Co. Ltd.

Read the full story on Caixin Global later.

Contact reporter Lu Yutong (yutonglu@caixin.com)


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By Ding Yi / Aug 06, 2020 02:18 PM / Business & Tech

Photo: VCG

Photo: VCG

Despite losing India, a market that contributed nearly a third of its global downloads, TikTok retained its position as the world’s highest-earning non-game app in July, driven by strong demand for Douyin, the local version of the app, in its home China market.

The besieged Chinese short video app raked in more than $102.5 million in revenue last month, 8.6 times higher than its earnings for the same period last year, according to statistics provided by research firm SensorTower.

SensorTower attributed this strong performance to Douyin’s performance on the Chinese market, accounting for approximately 89% of the app’s July revenue, with the U.S. market being its second-largest revenue source with 6%.

Meanwhile, TikTok continued to be the world’s most downloaded non-game app in July with more than 65.2 million installs, according to SensorTower. During the period, the U.S. accounted for 9.7% of TikTok’s global downloads, replacing India as the app’s biggest source of downloads, the research firm added.

TikTok was banned in India in June on national security grounds and is facing headwinds in the U.S., where the app is being forced by the Trump administration to sell its U.S. business to an American company in exchange for an opportunity to continue to operate there, Microsoft is thought to be the most likely contender to buy the app.

In a letter to his Chinese employees earlier this week, Zhang Yiming, founder and CEO of TikTok parent ByteDance, wrote that the intense U.S. security probe into TikTok was aiming for “a comprehensive ban, and maybe more”, rather than a forced sale.

TikTok is also under fire in Australia and Japan as some lawmakers allege it might pose a threat to national security and user privacy.

Contact reporter Ding Yi (dingyi@caixin.com)

Related: Baidu Search, Sina Weibo on ‘Secret List’ of Chinese Apps Banned in India’s Latest Purge


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By Ding Yi / Aug 05, 2020 06:04 PM / World

India has blocked Chinese search engine Baidu Search and social media platform Weibo in a fresh round of its tech purge taking aim at apps New Delhi believes might “harm” its “sovereignty and integrity”.

The move comes after India imposed a ban on 59 Chinese apps including ByteDance’s TikTok, Tencent’s WeChat and Alibaba’s UC Browser on June 29, citing national security concerns.

Baidu Search and Weibo are among 47 apps on a secret list that the Indian government banned on July 27, the Times of India reported on Tuesday, citing unnamed sources.

Unlike the first ban, the apps subject to the second ban have not been announced. The Times of India reports they are mostly clones and different versions of some of the first round of apps, including TikTok Lite, Likee Lite and Bigo Live Lite. The apps were targeted because they were said to participate “in activities prejudicial to the sovereignty, integrity and defense of India as well as the security of state and public order”.

An official source told the Times of India that the Indian government is also considering blocking more apps in the future.

Since the first Indian app ban in June, the U.S. has threatened to block some Chinese social media apps due to national security concerns, with the Trump administration tightening the screws on TikTok by asking it to sell its U.S. business by mid-September in exchange for an opportunity to continue to operate there.

Last week, a group of Japan’s ruling Liberal Democratic Party lawmakers said that they will urge the government to limit the use of TikTok on the grounds that the app could mishandle sensitive information.

Contact reporter Ding Yi (dingyi@caixin.com)

Related: Bytedance Founder Doubts Probe Intentions as Company Poised to Sell U.S. TikTok Under Duress


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Yilin Chen / Aug 05, 2020 05:20 PM / Trending Stories

What’s trending?

Following this year’s college entrance exam, or “gaokao,” netizens are once again eager to give advice on choosing a major. Zhong Fangrong, a girl from an ordinary village, scored 676 out of 750 in the exam, taking fourth place in the province. However, her decision to study archaeology at Peking University, one of the top universities in the country, was met by discouraging voices as people mocked her for not choosing a more lucrative major.

What’s the story?

Described as a “left-behind girl” by Chinese media, Zhong was mostly raised by her grandparents while her parents worked in Guangzhou to make a living. Despite receiving little educational resources and care from her parents, she ranked fourth out of 194,000 test-takers in the college entrance exam in the province.

Zhong told the media that she signed up for the archaeology major at Peking University to pursue her longstanding passion for history and cultural artifacts. She said her decision was influenced by Fan Jinshi, who is hailed as the “daughter of Dunhuang” for her dedication to preserving and studying the city’s Mogao caves. While many netizens admired Zhong’s courage to follow her dream, others teased her for being too idealistic and wasting an opportunity to climb higher on the social ladder.

Social science and humanities students consistently face stigma and lower earnings in China, whose job market favors scholars in science and finance. Zhong says she will be happy to work in schools or museums, with her parents fully supporting her decision. Meanwhile, numerous museums and scholars, including Zhong’s role model Fan Jinshi, have written words of encouragement on Weibo and sent her books, souvenirs, and archaeology-related supplies.

What are people saying online?

Fierce discussion on Weibo centered on the trade-off between earnings and personal interest, as this year’s high school graduates around the country nervously choose a path for their future. One user wrote, “We need to be realistic: making a living is more important than pursuing dreams. Moreover, China needs more scientists, engineers, and doctors. Teenagers at this age, especially those from rural areas, are ignorant about how society works.”

In response, many people point out that making a living is not hard given Peking University’s reputation. “The country’s desire for economic growth is important, but we should also respect individuals. We shouldn’t underestimate the merits of the humanities or blindly follow collectivism,” a person wrote. The majority of netizens voiced their support for Zhong, with many saying they regret not pursuing their passions due to concerns over money.

Contact editor Marcus Ryder (marcusryder@caixin.com)


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By Heather Mowbray / Aug 05, 2020 05:03 PM / Business & Tech

In June 2019, National Electric Vehicle Sweden, majority owned by Evergrande, started mass production of its first electric vehicle — the NEVS 9-3 EV, which was shown in the northern Chinese municipality of Tianjin in December 2017. Photo: IC Photo

In June 2019, National Electric Vehicle Sweden, majority owned by Evergrande, started mass production of its first electric vehicle — the NEVS 9-3 EV, which was shown in the northern Chinese municipality of Tianjin in December 2017. Photo: IC Photo

On August 3, Evergrande Health, a subsidiary of real estate conglomerate China Evergrande, announced the release of six pure electric vehicles, with the first being launched in the second half of next year. Initially due for release in the first half of 2020, the Hengchi series labeled 1 to 6 will include a sedan, an SUV, and a seven-seater van.

With plans to become the world’s largest new-energy vehicle group within three to five years, Evergrande seems to have changed tack since its first electric vehicle plans were hatched in 2018 under the Guoneng Automobile umbrella, formed from an acquisition.

“Evergrande had nothing to make cars with” Evergrande CEO Xu Jiayin said of his “car empire scheme” at an Evergrande New Energy Vehicle summit in November 2019, but went on to say “we’ve bought all the technology and companies that we can lay our hands on.”

Since 2019, China Evergrande has spent more than 20 billion yuan on developing an entire new-energy vehicle industry chain, complete with vehicles, batteries, motors and power systems. The company recruited former BMW designer Anderson Warming as one of three prestigious consultants.

According to Evergrande Health Vice President Peng Jianjun, the cars have now entered prototype testing.

Evergrande aims to complete its production bases in Songjiang in Shanghai and Nansha in Guangzhou this year, each with production capacity of 200,000 vehicles. So far the Nansha production line has not been assembled and the models it will produce have not been set.

On July 27, the company issued an announcement stating a board recommendation that Evergrande Health be renamed China Evergrande New Energy Automobile Group Co., Ltd., or Evergrande Automobile for short now that their focus is entirely on new energy vehicles.

Contact editor Marcus Ryder (marcusryder@caixin.com)

Related: Tesla Gaining Ground Pushes China Electric Vehicle Bubble Toward Bursting


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Heather Mowbray / Aug 05, 2020 04:47 PM / Trending Stories

What’s trending?

#MeituanRabbitEars is an extremely popular tag online, even spawning a group on Douban dedicated to images of takeaway riders in helmets decorated with cartoon-style ears. The trend takes competition between riders or “mobile billboards” from Meituan and Ele.me far beyond their distinctive yellow and blue uniforms.

What’s the story?

Meituan has distributed kangaroo helmets to its takeaway staff every summer as a publicity stunt. Based on Meituan’s logo – a leaping kangaroo – floppy helmet ears have been photographed across China’s cities, with the most popular showing delivery rivals, McDonald’s and Ele.me, admiring or touching each other’s uniform accessories.

Meituan Dianping now actively promotes the ears on social media, and even sells them for 6.9 yuan a piece on its virtual gift shop. Ele.me has opted to give Doraemon-style propellers to takeaway riders as a reward for good service. The trend has given rise to imitators too. Monkey King helmets have also been seen on the streets, and a photo of a rider in Guangzhou in a Hello Kitty helmet went viral.

Delivery platforms have struggled during Covid-19, as takeaway services have been curtailed by lockdown restrictions. “Selling cuteness” as this fad is known provides a face for big companies seeking to draw consumers closer in tough times. Indeed selling cuteness is at the heart of most internet campaigns, which is why internet companies like to use animals in their brands: A penguin for Tencent and a black cat for Tmall for example.

What are people saying online?

Some netizens have even signed up to become riders so they can obtain ears. They reveal their experiences on the Rabbit Ear Douban group, but are still unable to get the ears they dreamed of.

"God please let me see the little brother with the kangaroo ears again? I must ask how he got the helmet," said one of many fans.

Related: Covid 19 Might Be Make Or Break For Meituan 


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By He Shujing and Mo Yelin / Aug 05, 2020 03:15 PM / Business & Tech

Apple Inc. is facing a lawsuit worth billions of yuan after a Chinese company on Monday filed a papers to a local court, alleging the U.S. company infringed on one of its patents.

Shanghai Zhizhen Intelligent Network Technology Co. Ltd. filed the lawsuit on Monday to Shanghai High People’s Court seeking an estimated 10 billion yuan ($1.43 billion) in damages from Apple for the alleged infringement of its patent on a chatbot similar to Siri.

Shanghai Zhizhen, also known as Xiao-I, said the patent in question was applied for in 2004 and granted in 2009. Apple needs to cease “manufacturing, using, promising to sell, selling, and importing” products that infringe on the patent”, the company said in a social media post (link in Chinese).

Siri is a voice-activated feature in several of Apple’s products that allows users to perform actions such as setting alarms, accessing the internet, and other tasks. When Siri was first rolled out in 2011, it was used only in iPhones, but it has since been integrated into other products, including iPads, MacBooks and smart watches. The stakes are high for Apple. Losing the legal battle could mean Apple would have to suspend sales of a substantial part of its products range in China, its most important market outside the U.S.

In a statement, Apple said it was disappointed that Xiao-I filed the lawsuit and that Siri doesn’t contain features included in Xiao-I’s patent. “We look forward to presenting the facts to the court and we will continue to focus on delivering the best products and services in the world to our customers,” Apple said in a statement.

Read the full story on Caixin Global later.

Contact reporter Mo Yelin (yelinmo@caixin.com)


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By Ding Yi / Aug 05, 2020 01:25 PM / Economy

Six of the world’s ten largest unicorns — startups worth more than $1 billion — are headquartered in China, as the country aims to become the world leader in innovation.

Ant Group, the fintech arm of Chinese e-commerce giant Alibaba, ranks as the world’s largest unicorn with a valuation of $150 billion on the back of its planned initial public offering (IPO) in Shanghai and Hong Kong, according to the Hurun Global Unicorn Index 2020 released by Shanghai-based publishing group Hurun Report on Tuesday.

ByteDance claimed the second spot with a valuation of $80 billion despite a recent Indian ban on its flagship app TikTok. The app is also under fire in the U.S. with President Trump threatening to terminate the app’s U.S. operations if it is not sold by mid-September.

Chinese ride-hailing giant Didi Chuxing came in third with a valuation of $55 billion. The company is expanding its footprint across the globe and testing its autonomous taxi service as part of ongoing efforts to build a smart transportation system.

The other three Chinese unicorns breaking into the top 10 list are peer-to-peer online lending platform Lufax, TikTok rival Kuaishou and Alibaba’s logistics affiliate Cainiao.

China is home to 227 unicorns, six less than in the U.S., meaning that the two countries account for a combined 78% of the world’s 586 known unicorns based on valuations at the end of March, said Hurun Report.

“The U.S. and China continue to dominate with nearly 80% of the world’s known unicorns, despite representing only 40% of the world’s GDP and a quarter of the world’s population,” Hurun Report chairman Rupert Hoogewerf said. “The rest of the world needs to wake up to providing an ecosystem that allows unicorns to flourish,” he added.

When it comes to cities, Beijing is home to a greater percentage of unicorns — 16% — than any other city in the world. The Chinese capital is followed by San Francisco with 12% and Shanghai with 8%, according to Hurun Report.

Contact reporter Ding Yi (dingyi@caixin.com)

Related: China Home to One-Third of World’s Best Unicorn Investors, Hurun Report Says


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Yilin Chen / Aug 04, 2020 05:56 PM / Trending Stories

What’s trending?

NetEase Cloud Music, China’s leading music streaming service with over 800 million users, is home to “NetEase Depression Cloud,” which refers to sentimental stories posted for likes in the comments section of songs. Yesterday, NetEase Cloud Music officially launched a campaign to “cure comments” of feigned depression and provide emotional support to users who are genuinely struggling with mental health issues.

What’s the story?

On the NetEase Cloud Music app, the most popular comments frequently feature sad stories of break ups, loneliness, and despair. While some users complain that the sentimental comments make it impossible to enjoy songs in peace, those who need emotional support feel exploited by attention-seekers.

The topic went viral on Weibo with almost a billion views after NetEase Cloud Music announced its plans to spread positivity. The company says that it will recruit professional therapists and thousands of volunteers to respond to sad comments, as well as add a function that allows users to send virtual hugs to each other. Moreover, it has vowed to punish users who make up or copy stories to gain popularity, which will “cause misunderstandings and harm to people who are struggling with depression.” It also plans to “use love, humor, and wisdom to dispel negative sentiments” by inviting 10 thousand users to write song critiques and funny comments.

What are people saying online?

Despite being the latest buzzword, “NetEase Depression Cloud” has triggered mixed reactions among internet users. Some find it funny, while others believe the topic is no laughing matter. “This is the worst meme of the year,” one user wrote. “Many people actually suffer from depression, but they are labeled as a joke. I understand that the term refers to people who are making a fuss to attract attention, but an unintended consequence is that people going through a hard time have now lost a safe place to vent their emotions.”

The app’s new features seem to have resonated well with netizens. Some people believe this will help NetEase Cloud Music regain users who have gravitated towards rival apps such as QQ Music, if the app’s plans prove to be successful. Another user wrote, “Is NetEase Depression turning into NetEase Cure?”

Contact editor Marcus Ryder (marcusryder@caixin.com)


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By Ye Zhanqi, Denise Jia and Mo Yelin / Aug 04, 2020 02:11 PM / Business & Tech

Photo: Visual China

Photo: Visual China

The 28-nanometer chips that enable mobile devices to receive signals from Beidou satellite system are in mass production and core components of the navigation system are “100% made in China,” said the national satellite navigation authority on Monday.

Ran Chengqi, director general of the China Satellite Navigation Office, said at a press conference that mass production of more advanced, high-precision 22-nanometer chips will soon kick off, showing that China has mastered “world-class” technologies for satellite navigation chips.

China will create a complete industrial chain of chips, boards, and satellite services for Beidou, Ran said. In the past decade, the total output value of China’s satellite navigation and location services industry has grown at an average annual rate of more than 20% and is expected to exceed 400 billion yuan in 2020, according to Ran.

Now the Beidou system serves more than 100 million users in about 120 countries, supporting services such as smart port and land mapping, Ran said.

China started building the Beidou navigation system in 1994 and launched its Asia Pacific coverage in 2012. In June, the 55th and final satellite was put into orbit, completing the navigation network that is seen as China’s answer to the U.S.-owned Global Positioning System (GPS).

Read the full story on Caixin Global later.

Contact reporter Mo Yelin (yelinmo@caixin.com)


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Yilin Chen / Aug 03, 2020 06:29 PM / Trending Stories

What’s trending?

Lei Jun, founder and CEO of smartphone giant Xiaomi, has highlighted the unique sense of humor and culture of China’s netizens and possibly proven why it is better to roll with the jokes than try and fight them.

The billionaire officially launched his account on Chinese video-streaming platform Bilibili on July 30. As of today, the account has gained over 600 thousand followers and the first video has received almost 4 million views, with Lei promising to introduce viewers to Xiaomi’s new products and work environment in the future. Interestingly, his account bio reads “OK” and his profile picture shows him making an OK gesture, a reference to his rise to fame in Chinese meme culture five years ago.

What’s the story?

In 2015, a video of Lei at a product launch in India went viral, in which he repeatedly shouted “are you OK” to gauge the enthusiasm of his audience. It became a meme overnight after a Bilibili user autotuned Lei’s speech, converting it into a song. Lei’s popularity surged as he self-deprecatingly embraced the meme, even offering the song as a suggested ringtone on Xiaomi smartphones, which set him apart from celebrities who resisted internet humor and subsequently saw their reputations slump.

Since then, Lei has used his perceived charisma to publicize Xiaomi, appearing on the debate competition show “I Can I BB”, interacting with netizens on the Quora-like Zhihu and later becoming the first top executive to set up an account on lifestyle app Xiaohongshu. Services affiliated with Xiaomi, such as the MIUI operating system, have set up numerous publicity accounts on Bilibili. In February, Xiaomi collaborated with Bilibili by hosting online product launches for its Xiaomi 10 model, attracting millions of viewers.

Lei’s Bilibili account could be a new opportunity for Xiaomi, who has been trailing behind domestic rivals including Huawei, Vivo, and Oppo in terms of smartphone shipments and market share. Prior to launching his account, Lei posted on Weibo, “A friend recently asked for my opinion about the rising popularity of e-commerce livestreaming and speeches.” Coupled with the expected launch of a new Xiaomi 10 model in mid-August, it is suspected that Lei will use Bilibili as an e-commerce channel to promote new devices, allowing him to tap into Bilibili’s large user base of Gen Z consumers.

What are people saying online?

Internet users have widely praised Lei’s sense of humor and adaptability. “I admire Lei’s practical and hard-working attitude,” one user wrote. “He has been playing an active role in hosting livestreams, promoting Xiaomi’s brand, and attracting Gen Z users. You might not like him, but you have to respect him.” Another user echoed the sentiment, writing that “Lei has to be the most down-to-earth CEO.”

Other people have been excitedly predicting Xiaomi’s next move on Bilibili. Some expect the brand to increase interaction with fans by filming tours of the company, while others see more potential in livestreaming product launches and showing Xiaomi’s innovative features. Unsurprisingly, the comment section swarms with variants of “are you OK?”

Contact editor Marcus Ryder (marcusryder@caixin.com)


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By Ding Yi / Aug 03, 2020 04:27 PM / Business & Tech

Apple kicked more than 30,000 apps off its Chinese App Store on Saturday, including over 26,600 games, possibly in response to a Chinese policy requiring paid games or games offering in-app purchases to obtain a government license before publication, according to statistics provided by research firm Qimai.

The crackdown puts an end to the previous practice of allowing developers to sell games on the Chinese App Store while they were awaiting government approval, as Chinese regulators tighten their grip on apps which they deem could be used to spread “sensitive” content and the government increases efforts to combat gaming addiction.

Early signs of Apple’s purge appeared in February, when the U.S. company asked developers to submit government licenses for their paid games and games with in-app purchases before June 30. In July, Apple extended the deadline to July 31, at which point developers would be banned from continuing to operate on the Chinese App Store if they failed to submit such licenses.

Some industry experts said that the rule, which has been enforced by China’s major Android app store since 2016, is expected to take a toll on small game developers, some of which could switch their revenue model to in-app advertising to steer clear of the approval process which is long and complex.

As of Saturday, about 179,000 games remained on the Chinese App Store, of which some 160,000 were free, according to Qimai.

Contact reporter Ding Yi (yiding@caixin.com)

Related: Huawei and Apple Shine in China’s Smartphone Market During Second Quarter


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By Ding Yi / Aug 03, 2020 02:01 PM / Business & Tech

Chinese contract chipmaker Semiconductor Manufacturing International Corp. (SMIC) has unveiled plans to establish a joint venture to develop a new wafer plant in Beijing, as the company tries to increase semiconductor output and reduce costs.

SMIC and Beijing Economic-Technological Development Area Management Committee will jointly build the facility to make 12-inch wafers, a component in semiconductors used in the manufacture of integrated circuits, according to a filing published on the Shanghai Stock Exchange’s website on Saturday.

The plant aims to produce 100,000 12-inch wafers per month in the initial phase, the filing said, adding that it will make adjustments to its capacity in the second phase based on market demand.

First-phase investment in the project is set to be $7.6 billion, with SMIC contributing about 51% of an initial registered capital of $5 billion, according to the filing.

Some industry experts said that the new plant could help SMIC enhance its production capacity at a time when the Shanghai-based company is striving to close the technological gap with rivals such as Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC)

Last month, Hong Kong-listed SMIC made a secondary listing on Shanghai’s Nasdaq-style high-tech STAR Market. The company said that it would use the proceeds from the stock sale to develop 12-inch chips, bankroll the research and development of advanced technologies and supplement working capital.

Contact reporter Ding Yi (yiding@caixin.com)

Related: In Depth: Behind the Bet on China’s Pricey, Technologically Lagging Chipmakers


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By Zhang Qi, Zhang Erchi and Mo Yelin / Aug 03, 2020 01:36 PM / Business & Tech

Microsoft confirmed for the first time it is seeking to acquire the U.S. operations of short-video app TikTok from China-based parent company ByteDance Ltd., saying it will go ahead with the plan, despite reservations from U.S. President Donald Trump.

Following a conversation between Microsoft CEO Satya Nadella and President Trump, Microsoft is prepared to continue discussions to explore the purchase of TikTok activities in the U.S., as well as in Canada, Australia, and New Zealand, the U.S. software giant said in a statement on Sunday.

“Microsoft fully appreciates the importance of addressing the President’s concerns. It is committed to acquiring TikTok subject to a complete security review and providing proper economic benefits to the United States, including the United States Treasury,” the statement said.

Microsoft said it will move quickly to pursue discussions with ByteDance that are expected to conclude by September 15. It said it would also continue discussions with the U.S. government and President Trump during the process.

The Microsoft announcement came after Trump earlier said it would ban TikTok from the U.S. “As far as TikTok is concerned, we’re banning them from the United States,” the president told reporters Friday night. When asked when it would happen, he said: “Soon, immediately. I mean essentially immediately.”

Read the full story on Caixin Global later.

Contact reporter Mo Yelin (yelinmo@caixin.com)

Related: Trump Says He Will Ban TikTok From Operating in U.S.


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