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By Xue Xiaoli and Isabelle Li / Aug 19, 2019 05:18 PM / Business & Tech

Photo: VCG

Photo: VCG

China began in June handing out commercial licenses to operate fifth generation (5G) mobile networks. But how long it will take for the new technology to reach widespread use remains an open question.

It took 11 years for 2G network technology to have 1 billion users. To hit the same milestone, it took 10 years for 3G and seven years for 4G. How long will it take for next-generation 5G technology?

At a roundtable forum Thursday in Beijing, executives and experts from network operators, equipment providers and academia tried to answer the question. Opinions varied.

In the view of ZTE Corp. Vice President Luo Wei, it will take 5G three to five years to reach a billion users. Both the 5G network itself and the devices that make use of it will have to undergo an optimization process, which will take time Luo said. However, the inevitable strong demand for the new telecommunications technology will likely accelerate its development. “The most accessible device for 5G to reach consumers will absolutely be mobile phones,” he added.

But an executive from JD Logistics Inc. estimated that it might take 5G longer to reach the 1-billion-user milestone. Because growth in the number of mobile phone users has flattened in recent years, consumer demand for 5G won’t be as strong as it was for 4G (when phone users were growing at a faster pace), said Zhe Wenming, chief software architect and head of 5G research at JD.com Inc.’s logistics unit. Zhe believes it might take at least seven years for 5G to have a billion users, he said.

China’s three biggest carriers will announce the official launch of 5G for commercial use in September, said Wang Qiming, an executive at China Unicom, one of the country’s three mobile carriers. To figure out how long it will take China’s 5G market to mature, one can look at the number of 5G users at the end of this year, he said.

Read the full story on Caixin Global later today.

Contact reporter Isabelle Li (liyi@caixin.com)

Related: In Depth: China Races Early Into the 5G Era

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By Peng Qinqin and Guo Yingzhe / Aug 19, 2019 04:33 PM / Economy

Photo: IC Photo

Photo: IC Photo

China’s lending interest rate reform may bring greater benefits to larger borrowers, economists say.

The People’s Bank of China (PBOC) said Saturday in a statement that it would improve the formation mechanism of national loan prime rates (LPRs), which are based on the interest rates that specific commercial banks charge their most creditworthy borrowers, and replace its benchmark lending rates with the LPRs as a new reference for commercial banks’ new lending.

The new national LPRs are set to be launched on Tuesday and will be based on the LPRs used by 18 commercial banks. The banks will decide their own LPRs by adding integer multiples of 0.05 percentage points to the interest rates of open market operations, chiefly the medium-term lending facility (MLF), a kind of policy lending that the PBOC created to manage liquidity in the financial system.

The PBOC said that the move aims to make LPRs a more market-oriented mechanism and break the implicit floor on lending rates so as to lower borrowing costs in the real economy.

“The new LPR regime and the PBOC quasi-policy rate cuts could favor big state-owned borrowers while delivering few benefits to small and medium-sized enterprises,” economists at Nomura International (Hong Kong) Ltd. said in note.

Read the full story on Caixin Global later today.

Contact reporter Guo Yingzhe (yingzheguo@caixin.com)

Related: China Adds Detail to Long-Awaited Interest Rate Reform Plan

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By Matthew Walsh / Aug 19, 2019 04:19 PM / Business & Tech

Photo: IC Photo

Photo: IC Photo

Huawei reportedly plans to recruit some 1,500 people for new research and development centers in Russia, a move that hints that the world’s largest telecom company is pivoting toward other markets as it faces down sanctions and suspicion from many Western countries.

Huawei intends to recruit 500 people by the end of 2019 and attract a further 1,000 new specialists over a period of five years, the influential Moscow-based business daily Vedemosti reported Thursday, citing an unnamed Huawei representative who spoke directly to the newspaper.

If the reports are true, the move would nearly quadruple Huawei’s total R&D personnel in Russia. The company currently has two R&D centers in Russia: one in Moscow that employs 400 people, and one in St. Petersburg that employs a further 150, according to Vedemosti.

Now the company plans to open three new centers there by the end of the year, the representative said, without naming their locations. That would make Huawei’s Russia-based R&D operation its third-largest outside China after the United States and Europe.

Huawei will also establish cooperative relationships with Russian universities, research institutions, and the broader scientific community, the Vedemosti report said. The representative did not reveal which projects the company’s new employees will work on.

Earlier this month, Huawei unveiled its own operating system, HarmonyOS, in a development that will likely make the company less dependent on Google-made software that could potentially become subject to U.S. sanctions. Both the United States and a number of other countries remain concerned about the nature of Huawei’s ties to the Chinese state.

Read Caixin’s full coverage of Huawei here.

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By Tianyu M. Fang / Aug 19, 2019 01:04 PM / Business & Tech

Photo: VCG

Photo: VCG

Competition among Chinese phone-makers is fierce. But when it comes to allowing users to share files, it looks like they’re willing to team up.

Xiaomi, Oppo, and Vivo will launch a cross-platform file transfer protocol, according to a WeChat post by Xiaomi.

The peer-to-peer protocol will allow users to transfer files between different brands of Android smartphones — paired by Bluetooth — without using cellular data. Details are scant, but it should be similar to Apple’s AirDrop, which allows file transfers between Apple devices over peer-to-peer Wi-Fi connections.

AirDrop’s counterpart on the Android platform was Android Beam, a NFC-based file transfer feature that would be discontinued in Android Q.

Xiaomi said that other phone manufacturers will be welcomed to adopt the protocol, whose beta version will be available by the end of August.

Related: Oppo to Unveil New Smartphone With 20x Zoom

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By Bloomberg / Aug 19, 2019 10:09 AM / Business & Tech

Customers browse inside the Apple Inc. store in Hong Kong

Customers browse inside the Apple Inc. store in Hong Kong

President Donald Trump said Apple Inc. Chief Executive Officer Tim Cook voiced concerns about chief competitor Samsung Electronics getting an edge because its products, unlike Apple’s, won’t be subject to tariffs when imported by the U.S.

Cook and Trump had dinner on Friday night, while the president was at his golf club in Bedminster, New Jersey. Trump described the conversation to reporters as he prepared to travel back to Washington.

The majority of Apple’s products are due to be hit with 10% tariffs in the next weeks or months. Levies on the iPhone, iPad, and Apple laptops have been pushed back to Dec. 15, but the tariff hit on the Apple Watch, AirPods, and many accessories is still planned for Sept. 1.

Trump said Cook made a “good case” about the difficulty in competing with Samsung if Apple products are subject to import tariffs. “I thought he made a very compelling argument.”

Apple will be hit by tariffs because it makes the majority of its devices in China before importing them to the U.S. and other parts of the world.

Samsung, however, builds its products across several countries, including Vietnam and South Korea in addition to China. That means their tariff impact will be far less than the impact to Cupertino, California-based Apple.

“It’s tough for Apple to pay tariffs if it’s competing with a very good company that’s not,” Trump said.

Apple needs to incorporate the cost of tariffs into the cost of goods, while Samsung currently won’t, putting Apple at a competitive disadvantage. Samsung is launching its latest device, the Note 10, later this month, while Apple is planning upgrades to the Apple Watch, iPhone, and its computers for later this year.

Related: Huawei Smashes Samsung-Apple Smartphone Duopoly, but Does It Have Longer-Term Legs?

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By Tanner Brown / Aug 19, 2019 09:51 AM / Society & Culture

Photo: Caixin

Photo: Caixin

At the foot of a mountain covered in green and surrounded by farmland, Dashuidong village in central China’s Hunan province has long been known for longevity endowed by nature. But nowadays, simply staying healthy has become a distant dream for many in the village.

Dashuidong, in Fuqiushan county, has been haunted by the highly contagious Hepatitis C virus (HCV) over the past decade. Along with two neighboring towns — Huangheqiao and Tanshanqian — the mountain villages are now notorious as Hepatitis C villages, keeping people away.

There are no accurate statistics on villagers infected by the virus because of people’s lack of awareness of early symptoms and unwillingness to report and because of frequent outflows of young people seeking urban jobs. Several villagers in Dashuidong told Caixin they think 30% to 40% of the 3,000 people there have been infected with HCV. A local disease control official said the actual figure couldn’t be that high, but he said about 2.8% of the 55,000 people in Fuqiudong county have been diagnosed with HCV infection, nearly triple the national average of 1%.

Read the full story here

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By Wei Yiyang and Denise Jia / Aug 17, 2019 05:12 AM / Business & Tech

Photo: VCG

Photo: VCG

The head of Hong Kong’s major airline, Cathay Pacific Airways, resigned Friday following Beijing’s warning to the carrier over participation by some employees in the city’s recent mass protests.

Cathay Pacific CEO Rupert Hogg and Chief Customer and Commercial Officer Paul Loo resigned “to take responsibility as a leader of the company in view of recent events,” the company said in a stock exchange filing Friday. They also resigned as executive directors.

The airline also said in the statement that Cathay Pacific is fully committed to Hong Kong under the principle of “One Country Two Systems” and is confident that Hong Kong will have a great future.

The Civil Aviation Administration of China, the mainland’s airline regulator, issued a safety notice to Cathay last Friday, asking the company to ban employees who support or take part in “illegal demonstrations, protests and violent attacks” and those who “have had radical behavior” from working on flights to the mainland. The regulator also required Cathay to submit identification information about all crew members on flights to the mainland and or passing through the country’s airspace.

Cathay Pacific has since fired two ground service staff and suspended a pilot, and it warned staff that those who support or participate in illegal protests would face serious disciplinary consequences, including being fired.

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By Matthew Walsh / Aug 17, 2019 04:13 AM / Business & Tech

Photo: VCG

Photo: VCG

Chinese scooter maker Segway-Ninebot Group unveiled a scooter Friday that can autonomously drive itself back to charging stations, Reuters reported.

The technology, which holds potential for the emerging scooter-sharing industry, has already attracted interest from ride-hailing companies Uber and Lyft and could be rolled out early next year, according to the report.

Such semi-autonomous, AI-driven scooters could help operators slash the maintenance costs of their vehicles and potentially make scooter-sharing more profitable, Gao Lufeng, Ninebot’s chairman and chief executive, told Reuters in an interview.

Beijing-based Ninebot acquired American personal-transporter manufacturer Segway in 2015 and is now the world’s largest supplier of electric scooters. The company’s sales reportedly grew six-fold last year to 1.6 million units.

Contact reporter Matthew Walsh (matthewwalsh@caixin.com)


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By Tianyu M. Fang / Aug 16, 2019 08:53 PM / Business & Tech

Photo: IC Photo

Photo: IC Photo

Chinese smartphone brand Oppo made headlines in April when it unveiled the Reno, a line of camera phones one of which boasts an eye-popping 10x optical zoom.

But the company is already primed to roll out the technology’s next stage. And if a Friday tweet from its official Twitter account is anything to go by, this time Oppo is focusing on the Indian market.

The tech giant will launch its Reno2 series there on Aug. 28, the tweet said, adding that the phone’s cameras will support 20x optical zoom. If true, that will signal that Oppo has beaten its competitors to become the first company to offer such technology in a smartphone.

The Reno2 will also have four rear cameras, an upgrade from the triple-cam setup of the current Reno 10x Zoom Edition, according to the tweet. The company gave no further details about the model.

Guangdong-based Oppo has mostly targeted Asian and European consumers, but is increasingly targeting India, where it had a smartphone market share of 7% in the first quarter of this year, according to market research company Counterpoint.

Related: Oppo Edges Closer to 5G Commercialization

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By Zhao Runhua and Han Wei / Aug 16, 2019 06:23 PM / Business & Tech

Photo: VCG

Photo: VCG

Chinese companies are racing to bring synthetic meat to local foodies, reaching out to potential consumers even before any products have made their commercial debut in the country.  

Visitors will be invited on Sept. 12 to try “Omnipork,” a plan-based meat product developed by Hong Kong startup Green Monday, at the annual “Taobao Maker Festival” hosted by Alibaba’s e-commerce platform Taobao, Alibaba said. This will be the first time the product is available to mainland customers. 

Meanwhile, Chinese vegan startup Starfield, will formally introduce moon cakes containing synthetic meat in September, in a partnership with the Beijing Technology and Business University, Changjiang Daily reported.

Most forms of synthetic meat currently available use vegetable protein as an alternative to animal protein while adding in substances like heme to mimic the taste and texture of real meat. Synthetic meat makers aim to achieve a nutritional value similar to real meat in terms of protein content.

In the U.S., fast-food chain Burger King has already served meatless Impossible Whoppers in a partnership with leading synthetic meat player Impossible Foods. 

Contact reporter Zhao Runhua (runhuazhao@caixin.com)

Related: In Depth: The Meaty Taste of Meatless Food of the Future

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By Zhao Runhua / Aug 16, 2019 04:22 PM / Society & Culture

Photo: VCG

Photo: VCG

It’s already the most successful Chinese animated movie off all time, raking in more than 3.8 billion yuan ($539.86 million) since its release on July 26.

Now, “Nezha” — the tale of an anti-authority hero from Chinese mythology — is hoping to wow audiences abroad like it has at home.

The film will debut in cinemas in Australia and New Zealand on Aug. 23 and Aug. 29, respectively, while North American moviegoers will also be able to watch it at an unspecified future date, according to official announcements on Chinese microblogging site Weibo.

“Nezha” has topped China’s daily box-office revenue list for 21 straight days since its release, making it the country’s fourth-highest grossing movie of all time, according to data by industry tracker Maoyan data.

Contact reporter Zhao Runhua (runhuazhao@caixin.com)

Related: Smash Hit ‘Nezha’ Poised to Break Record for Animated Films

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By Matthew Walsh / Aug 16, 2019 03:48 PM / Politics & Law

Photo: IC Photo

Photo: IC Photo

The World Trade Organization (WTO) has established a dispute panel to resolve a row over U.S. safeguard duties on imports of Chinese solar cells, Reuters reported Thursday.

China claims that the United States is violating WTO rules by imposing a tariff-rate quota on imports of Chinese solar cells and increased duties on imported solar modules. The panel was set up automatically after China requested it for a second time at a meeting of the WTO’s Dispute Settlement Body, according to Reuters.

The decision came as the world’s two largest economies seek to ease long-running trade tensions that continue to cast a shadow over the solar industry. In January last year, the Trump administration imposed 30% “safeguard tariffs” on solar panels produced outside the United States, ostensibly to push a domestic solar industry heavily reliant on cheap imports toward buying more U.S.-made panels.

Washington then specifically targeted China in August last year, charging additional duties of 25% on Chinese solar cells and panels. The move was widely seen as an expression of broader U.S. complaints that China unfairly uses subsidies and bulk manufacturing to outcompete American companies in a number of industries, an accusation that China denies.

At the time, China’s commerce ministry said the U.S.’s extra measures harmed Beijing’s interests and distorted the global renewables market. China later filed an initial complaint with the WTO. 

So far, the effectiveness of U.S. solar tariffs remains unclear. Some experts have claimed that they contributed to thousands of job losses in the American solar industry last year, while others say they have had little effect on Chinese solar companies that shifted production overseas to avoid previous U.S.-China trade disputes.

Contact reporter Matthew Walsh (matthewwalsh@caixin.com)

Related: Solar Power Now Cheaper Than Grid Electricity Across China, Study Finds

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By Tianyu M. Fang / Aug 16, 2019 03:22 PM / Business & Tech

Photo: IC Photo

Photo: IC Photo

E-commerce retailer Vipshop’s NYSE-listed stocks soared Thursday (New York time) after the company reported strong profit growth in the second quarter.

The Chinese company reported a quarterly revenue of 22.7 billion yuan ($3.3 billion), a 9.7% year-on-year increase, and a gross profit of 5.1 billion yuan, up 25.9% from the second quarter of 2018.

Compared to the same period last year, the total number of active customers rose from 29.8 million to 33.1 million — an increase of 11%. Total orders grew by 33%.

Vipshop stock had risen 15.02% to $7.20 per share by market close on Thursday.

Vipshop acquired Chinese brick-and-mortar chain Shan Shan Outlets back in July, in an effort to expand its presence in physical retailing.

Related: Vipshop Gets Physical With $422 Million Brick-and-Mortar Purchase

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By Guo Yingzhe / Aug 16, 2019 03:07 PM / World

Photo: VCG

Photo: VCG

Japan replaced China as the largest holder of U.S. government debt in June amid an escalating Sino-U.S. trade war.

Although China’s store of Treasury bonds rebounded by $2.3 billion to $1.11 trillion — up from a two-year low in May — Japan’s holdings grew by $21.9 billion to $1.12 trillion, reaching their highest point since October 2016, according to data released Thursday by the U.S. Department of the Treasury.

The figures represent the first time since May 2017 that China is not the largest holder of Treasury bonds. Previous data from the U.S. Census Bureau also showed that China is no longer the U.S.’s largest trade partner, falling to third place during the first six months of the year behind Mexico and Canada.

U.S. President Donald Trump threatened Aug. 1 to impose additional tariffs of 10% on a further $300 billion of Chinese goods starting Sept. 1, further fanning the flames of an already-fierce trade war. However, the U.S. Trade Representative’s office announced Tuesday that new tariffs on certain goods will be delayed until mid-December.

Read the full story on Caixin Global later today.

Contact reporter Guo Yingzhe (yingzheguo@caixin.com) 

Related: Charts of the Day: China No Longer No. 1 for U.S. as Trade Row Bites

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By Zhao Runhua / Aug 16, 2019 12:57 PM / Business & Tech

Huawei's Mate 20 X 5G. Photo: VCG

Huawei's Mate 20 X 5G. Photo: VCG

Chinese telecommunication giant Huawei’s first commercial 5G handset debuted Friday morning to an enthusiastic response from consumers, even as the country’s 5G infrastructure remains in its infancy.

The Mate 20 X 5G sold out within 30 minutes of its debut at Huawei’s official store in Sanlitun, a busy commercial area in central Beijing. A salesperson at the store explained that the store had only 22 Mate 20 X 5G handsets in stock, out of a first batch of 1,000 handsets priced at 6,199 yuan ($881.45) released across the country.

Huawei said prior to the Mate 20 X 5G’s debut that the company had received over 1 million applications to purchase the phones.

Customers didn’t appear to have been discouraged by the limited 5G services currently available in the country. At the moment, only some parts of China’s largest cities, including Beijing, Shanghai, Guangzhou, and Shenzhen, have 5G mobile internet coverage. Caixin learned that telecom branches in other areas have yet to receive detailed instructions to roll out 5G services.

To encourage more people to switch to 5G, China’s telecom operators are offering special trial data packages for users in major cities and have emphasized that 5G handsets can automatically switch to the country’s mature 4G network if they detect poor connections.

A Huawei staffer told Caixin that another 5G model—Huawei Mate 30 X 5G—might be availble for pre-order in September, and could formally debut by the end of this year in China.

Contact reporter Zhao Runhua (runhuazhao@caixin.com)

Related: Markets Cheer Beijing’s Call for Carriers to Team Up on 5G
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By Bloomberg / Aug 16, 2019 10:01 AM / Business & Tech

Photo: Bloomberg

Photo: Bloomberg

The promise of artificial intelligence has yet to translate into big business. Now Kai-Fu Lee, a prominent venture capitalist in China and founder of Sinovation Ventures, says his firm’s new startup should be able to reach $100 million in revenue next year and go public the year after.

AInnovation, established in March 2018, develops artificial intelligence products for companies in industries such as retail, manufacturing, and finance. Its customers include Mars, Carlsberg, Nestle, Foxconn, China Everbright Bank and Postal Savings Bank of China.

Chief Executive Officer Hocking Xu, a veteran of International Business Machines and SAP SE, has hired staff that work with traditional companies to figure out how to take advantage of AI in their operations. AInnovation is on track to hit $100 million in revenue within two years of its founding, the fastest pace yet for such a startup, Lee said.

“We took the approach of ‘Let’s take some of the best business people and let’s target the industries which need AI the most’,” he said.

Lee figures AInnovation will be able to go public in less than two years at a valuation of $1 billion to $2 billion. The firm has raised about $70 million so far from Sinovation, CICC ALPHA and Chengwei Capital. Since the company was funded with yuan, it would most likely list domestically, either on China’s new NASDAQ-like Star market, or on the country’s ChiNext.

For retail companies, AInnovation sells products including a smart vending machine that opens with facial recognition and software that monitors retail shelves with image recognition. It’s created computer vision technology that detects defects on the production line for manufacturers and underwriting software and natural language processing technology for financial firms.

In artificial intelligence, “we’re still at a very early stage in the commercialization,” Lee said. “We’re still at the equivalent of early internet portals, back when everybody was using Yahoo and there wasn’t even a Google, Amazon, or Facebook.”

The former president of Google China, Kai-Fu Lee founded Sinovation Ventures in 2009. It manages more than $2 billion across seven funds in U.S. and Chinese currencies. It holds shares in more than 300 companies, most of which are in China. Its investments include autonomous driving company Momenta, consumer AI chip firm Horizon Robotics Inc. and bitcoin mining and AI chip company Bitmain Technologies Ltd.

Venture deals in China have been plummeting as investors pull back amid escalating trade tensions and slowing economic growth. The value of investments in the country tumbled 77% to $9.4 billion in the second quarter from a year earlier.

“In an economy that’s slowing down, everything slows, including venture capital. There will definitely be a shakeout,” Lee said. “The positive side is that if the economy is challenging, and valuations are down, it’s a good time for us to go shopping.”

Sinovation was one of the first Chinese venture capital firms with a presence in the U.S. With the trade war and the Trump administration’s tighter scrutiny of foreign investments, the firm has scaled back investments and no longer has an office in the U.S., Lee said, adding that investments in America have always been a small fraction of its overall investments.

“In the long term, it’s a pity if we have to cause a total separation of two countries because one could argue that AI got to where it got because the whole world has been able to work together.”

Related: Gallery: AI Innovations on Display

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By Denise Jia / Aug 16, 2019 03:08 AM / Business & Tech

Photo: VCG

Photo: VCG

Alibaba Group Holding Ltd. posted strong revenue and earnings for the second quarter, boosted by a record-breaking mid-year shopping festival in June, although sales growth slowed from a year earlier.

For the three months ended in June, the Chinese e-commerce giant reported revenue of 114.9 billion yuan ($16.74 billion), an increase of 42% over a year ago, beating Bloomberg analysts’ estimate of 111.6 billion yuan, but slower than the 61% year-on-year revenue growth in the same period last year, the company said Thursday.

During the promotional period from June 1 to June 18, Alibaba’s Tmall online shops recorded 38% year-over-year growth in gross sales.

The company said its non-GAAP diluted earnings per share were 12.55 yuan, an increase of 56% over a year ago.

The growth was driven by the company’s core e-commerce business and cloud computing. Core e-commerce, which accounts for about 87% of total revenue, grew 44% over the same period last year. Cloud computing revenue expanded 66% year-over-year to 7.79 billion yuan.

Annual active consumers on Alibaba’s China retail marketplaces reached 674 million, an increase of 20 million from the 12-month period ended March 31. The company said that more than 70% of the new customers were from less-developed areas, highlighting its efforts to deepen its penetration into lower-tier cities.


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By Bloomberg / Aug 16, 2019 03:04 AM / Business & Tech

Photo: VCG

Photo: VCG

Baidu Inc. has dropped off the list of China’s five most valuable internet companies, underscoring the challenges facing the search giant from a weakening economy to intensifying competition.

NetEase Inc., China’s second-largest gaming house, overtook Baidu in market value after posting better-than-expected quarterly earnings last week. Shares of NetEase gained 11% this year while Baidu’s plunged 40%.

Baidu, once touted as a member of China’s internet triumvirate alongside Alibaba Group Holding Ltd. and Tencent Holdings Ltd., has bled $66 billion of market value since its peak in May 2018 — the equivalent of one Morgan Stanley.

Baidu has struggled to fend off competition from the likes of Tencent and ByteDance Inc., both of which are luring smartphone-savvy consumers and advertisers to their popular mini-video and social media apps.

The company enjoyed a near-monopoly in Chinese internet search after Google departed in 2010 over government censorship. This week, ByteDance launched its own stand-alone search engine, posing a serious threat to the almost two-decades-old Baidu. The company was previously pushed out of the top three in market value by e-commerce operator JD.com Inc. and food delivery service Meituan.

Baidu, together with rivals Alibaba and Tencent, has long formed part of a trio of leading internet companies known by the acronym BAT. Now even that title seems under threat, with some dubbing ByteDance the new “B” in the group. Baidu in May posted its first quarterly loss since its 2005 stock market debut, after the Chinese economy slowed and rivals chipped away at its advertising sales.

Related: In Depth: Baidu Plays Catch Up on Mobile With Super App

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By Liu Shuangshuang and Han Wei / Aug 16, 2019 02:58 AM / Business & Tech

Photo: VCG

Photo: VCG

The municipal commerce regulator in Beijing issued a plan Thursday to ease control over foreign investment in cultural and entertainment businesses, including online games, audio and video content production and performance.

The plan, which spans eight sectors from internet and tourism to education and finance, will be carried out over the next three years to grant more liberalization for foreign investors in the city’s cultural and entertainment market.

Under the plan, foreign investors will be allowed to provide online entertainment content and set up wholly owned entertainment venues and performance agencies for nationwide operations.

The plan will also allow foreign investors to invest in audio-visual production in certain industrial zones and parks in Beijing in partnership with domestic investors.

Chen Shaofeng, a cultural industry policy professor at Peking University, said the plan will bring significant changes for foreign investors in China’s cultural and entertainment market as they will be able to gain control of content production companies, movie theaters and other performance ventures. But the content they provide will subject to the same requirements and standards for regulatory approval as domestic companies, according to the plan.

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By Shi Rui and Han Wei / Aug 16, 2019 02:53 AM / Business & Tech

Photo: VCG

Photo: VCG

Maoyan Entertainment, China’s top movie-ticketing platform backed by Tencent Holdings, recorded its first-ever half-year net profit despite sliding box-office sales.

Six-year-old Maoyan posted adjusted net profit of 380 million yuan ($54.1 million) for the first half of 2019, compared with a net loss of 20.6 million yuan a year ago, the company said Thursday.

The turnaround reflects Maoyan’s massive cuts in sales and market spending and was boosted by surging advertising income, according to the company’s financial report.

In the first half, Maoyan’s spending on sales and marketing fell by almost half to 611 million yuan from 1.1 billion yuan in the same period last year. The company said the reduction was mainly due to shrinking incentives offered to users.

By the end of June, Maoyan accounted for more than 60% of China’s online movie ticketing service market share.

Maoyan’s online ticketing revenue declined 6% year-on-year in the first half while e-commerce business dropping nearly 20%, reflecting a movie industry slowdown this year. But content services and advertising business bolstered Maoyan’s earnings with strong growth. Revenue from advertising rose 78% year-on-year to 156 million yuan.

For the first half, Maoyan booked total revenue of 1.99 billion yuan, up 4.7% from a year ago.

Related: Maoyan Sees Share-Price Estimate Slashed After Market Downturn

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