Aircraft manufacturer Airbus plans to launch on-demand helicopter services in China, the company said Wednesday during a briefing.

George Xu, Airbus China’s CEO, told reporters that the company expects to roll out the services in southern China's Guangdong-Hong Kong-Macao Greater Bay Area sometime around the end of this year, adding that the area’s high urban density and consumption power show the business potential of short-distance air trips. Some of the flights may eventually be piloted by unmanned helicopters, Xu said.

Airbus’ helicopter manufacturing arm is the first foreign company to have established an assembly line in China, according to state news outlet China Daily. But it’s not the only company interested in on-demand air trips: Earlier this month, well-known domestic carmaker Geely agreed to invest $55 million in German flying-car developer Volocopter to beef up the latter's research capabilities and turn its airborne-taxi project into a commercial reality within three years.  

Related: Chinese Auto Giant Invests in Flying-Car Startup Volocopter

China’s large refiners are facing uncertainties after a drone attack on an oilfield in Saudi Arabia halved supplies of crude, refiners and analysts told Caixin.

Saudi Arabia is the largest source of China’s crude oil imports, with state-owned giants China Petroleum & Chemical Corp. and China National Petroleum Corp. the dominant buyers. In the first seven months of this year, China imported 44.8 million metric tons of crude from the kingdom, accounting for 16% of its total imports.

The weekend attack that damaged most light crude oil facilities in the desert kingdom has prompted the two Chinese firms to swap some of their crude to heavier grades, which yield less gasoline and other fuels, company insiders told Caixin.

Analysts at the consulting group Wood Mackenzie said it will take a few weeks until most output from Saudi Arabia is restored, but the Middle Eastern nation may face challenges in finding suitable kinds of crude to make up the shortage.

Read the full story later on Caixin Global.

Contact reporter Tang Ziyi (ziyitang@caixin.com)

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Alibaba’s smart speaker Tmall Genie can now grant the wishes of Chinese coffee lovers thanks to a tie-up with Starbucks.

Caffeine aficionados can verbally place orders through Genie as part of an expanded partnership between the two companies, Alibaba announced Wednesday.

The e-commerce giant’s food delivery affiliate Ele.me will then process the order and consumers can expect to be sipping on a brew within 30 minutes, Alibaba said.

Previously, Chinese consumers were able to order Starbucks online either through the American coffee chain’s on-demand service app Starbucks Now or through Alibaba’s other e-commerce offerings such as supermarket chain Freshippo, also known as Hema.  

The cooperation will better allow Starbucks to serve tech-savvy Chinese customers, said Molly Liu, an executive at Starbucks China, adding that the voice ordering service will make user experience “truly personal” and more convenient.

The service might also pep up Alibaba’s smart-speaker business in China, as more and more tech companies establish partnerships with existing service providers in a bid to boost sales and user base. Baidu, China’s leading player in the smart-speaker sector, offers users a special membership program jointly supported by Baidu and iQiyi, one of China’s leading video streaming platforms.

Contact reporter Zhao Runhua (runhuazhao@caixin.com)

Related: Chart of the Day: Smart Speaker Shipments Surge

Gaming giant Tencent and smartphone maker Xiaomi have been trying their hand at the old game of share buybacks this year with quite different results. Companies typically launch such repurchases when their stock comes under pressure, using idle cash to try and convince investors the shares are undervalued and a good buy.

Tencent came under pressure for much of last year after the government froze approvals of new online game titles that are its main breadwinner. In response, the company launched its first buyback in four years last September.

Meanwhile, Xiaomi, which has had difficulty winning investor respect since its IPO last year, has come under the microscope this year as its sales have dropped sharply in its home China market. It launched its buyback at the start of the year as its shares traded around all-time lows at that time.

Both companies are still in the market buying shares, with a new Tencent disclosure revealing it has bought back its stock over the last seven trading days through Monday. A similar Xiaomi disclosure said the company’s board met on Sept. 2 and “formally resolved to utilize” its buyback plan, which authorizes the repurchase of up to HK$12 billion ($1.5 billion) worth of Xiaomi stock.

Tencent’s plan seems to have worked, as the stock has stabilized and is now about 10% higher from where it was when the original buyback began. Xiaomi has been another story, however, with the stock now trading about 10% below where it stood when it first launched its plan.

Related: Tencent Buys Own Stock for First Time in Four Years as Shares Sag

Chinese telecoms giant Huawei unveiled Wednesday a homegrown artificial intelligence (AI) training cluster the company claims is the fastest in the world.

Called the “Atlas 900,” the cluster consists of around 1,000 Huawei Ascend 910 AI processors and has the computing power of half a million personal computers, Huawei said. It trained the much-lauded ResNet-50, a residual-network AI model often used in image recognition, in merely 59.8 seconds, Huawei Vice Chairman Hu Houkun said during the annual Huawei Connect conference in Shanghai.

The Atlas 900 has already been integrated into Huawei’s cloud infrastructure and is available for use, Hu said. Citing the research and advisory company Gartner, Hu said the computing sector’s market size is expected to reach $2 trillion within five years.

The development of the data and AI industries has created a need for technology companies to provide infrastructure that supports high computing power. Computer clusters fill that need by linking large numbers of computers into a single system and setting their nodes to perform the same task, resulting in higher speeds and increased capacity and scalability while reducing costs.

Huawei will continue to offer developers both hardware and software support, some of which will be open-source, Hu added. The company said at the conference that its Huawei Developer Program, which encourages developers to innovate on Huawei products and systems, will receive $1.5 billion to grow its number of participating developers from 1.3 million to 5 million.

Contact reporter Zhao Runhua (runhuazhao@caixin.com)

Related: Experts: Huawei’s Offer to License 5G Technologies a ‘Smart PR Move’

(Bloomberg) — The U.S. government will need to agree to talks with Huawei Technologies Co. as part of a future trade deal with China, a top executive at China’s largest technology company said.

Huawei has become a focal point for U.S.-Chinese tensions and is regarded by some as a bargaining chip in the negotiations. Washington’s decision to stop the company buying American technology has cut it off from vital supplies such as Qualcomm Inc. chipsets and Google’s Android operating software.

Chief Security Officer Andy Purdy said he “can’t imagine” a trade deal in which the U.S. government doesn’t agree to hold discussions with Huawei.

“The most that a trade deal would do relative to Huawei would be to result in the U.S. government having discussions with Huawei, to try to work out the agreement between Huawei and the U.S,” Purdy said at a briefing in Budapest on Sept. 10.

The U.S. has urged countries and companies to reject Huawei technology in the next generation of wireless networks, telling allies it could put their citizens’ data at risk. Huawei has denied any wrongdoing and accused the U.S. of singling it out for political reasons.

Purdy said the U.S. crackdown against Huawei is hurting American companies and workers more than Huawei. He said the company spent $11 billion on U.S. supplies last year and an estimated 40,000 U.S. jobs depend on its business.

Huawei wants “transparent mechanisms” for evaluating its equipment and that of its competitors, which would build “trust through verification,” Purdy said.

“We’re not asking we should simply be allowed to sell without any scrutiny,” he said. “We believe there has to be scrutiny for everyone.”

China will spend more than $2.9 trillion on new aircraft and ground services over the next 20 years as its civil aviation market continues expanding to become the world’s largest, according to Boeing Co.

China will need 8,090 new planes worth nearly $1.3 trillion by 2038 to meet the demands of its rapidly growing air traffic, Boeing said in its annual outlook on the commercial aviation market released Tuesday.

Chinese airlines will also need to spend additional $1.6 trillion on ground services such as cargo operations and maintenance over the next 20 years, Boeing said.

The total estimate is 7% higher than Boing’s forecast last year.

Boeing said passenger traffic within China is set to grow at more than 6% a year until 2038 as China’s middle class is expected to double in size within a decade.

A Chinese self-driving truck startup attracted $120 million of funding from a group of investors including package logistics giant UPS.

TuSimple, based in San Diego and Beijing, said Tuesday that other investors in its Series D round of financing include Chinese private equity firm CDH Investments and Korean auto parts supplier Mando Corp.

TuSimple raised $95 million in a funding round in February led by Chinese internet giant Sina Corp. At that time, the company was valued at $1 billion. The new investment brings TuSimple’s total funding to $298 million.

The company said the new funds will be used to expand long-haul services for fleets and develop a commercial self-driving truck.

TuSimple is working on the validation of its self-driving truck solution with UPS and the U.S. Postal Service, aiming to transform the $800 billion U.S. trucking industry, the company said in a press release. Currently UPS and TuSimple conduct daily testing between Phoenix and Tucson.

The company has 50 trucks on the road worldwide serving 18 contracted customers.

Contact reporter Denise Jia (huijuanjia@caixin.com)

China will release 10,000 metric tons of pork from state reserves this week to cope with a supply shortfall of the staple food ahead of the week-long National Day holiday.

The frozen pork will be auctioned online Thursday afternoon, according to a statement (link in Chinese) published Tuesday by China Merchandise Reserve Management Center, which manages the state pork reserves.

Each company whose business record qualifies it to participate in the bidding is restricted to buying as much as 300 tons of pork, according to the statement.

China is the world’s largest consumer of pork, but a devastating outbreak of African swine fever has wiped out about a third of its hog herds and sent pork prices to record highs.

According to the Ministry of Commerce, the average pork price in 22 major Chinese provinces and cities surged 31.4% during August. That forced Nanning, the capital city of South China’s Guangxi Zhuang autonomous region, to make a rare government-led price intervention by offering subsidies to meat vendors to cut pork prices.

Central government bodies have pledged measures to support pork supplies, such as increased subsidies to boost domestic production and raising purchases from overseas.

Related: China Vows to Ensure There’s Enough Pork to Eat

The husband-and-wife former chairpeople of an Inner Mongolia-based home appliance wholesale company were seemingly so inseparable that they even manipulated the firm’s stock prices together.

Now, the erstwhile chairman of Benteng Technology Industry Group, Zhang Yuda, along with his wife, former vice chairwoman Zhang Xiaomin, have been banned from participating in securities-related activities for manipulating stock prices and “maliciously” attempting to hinder a malpractice investigation by the China Securities Regulatory Commission (CSRC), the regulator said in several recent announcements.

During one week from Dec. 30, 2016 to Jan. 6, 2017, the Zhangs used their senior positions to manipulate nine affiliated trading accounts on the National Equities Exchange and Quotations (NEEQ), China’s over-the-counter stock market, according to the CSRC. The Zhangs’ actions caused Benteng’s stock price to almost double in value.

The unscrupulous duo also had Benteng publish untrue statements with the aim of misleading investors, the investigation showed. The illegal trading and abnormal price fluctuations affected NEEQ indexes, the regulator said.

When the CSRC later opened an inquiry into the Zhangs’ shenanigans, the couple threatened investigators and even installed wiretaps at their workplaces in a bid to derail their progress, the regulator said, adding that the pair showed “contempt” for Chinese law.

The CSRC said it will confiscate the couple’s ill-gotten gains of 703,692 yuan ($99,528), issue a 3.52 million yuan fine, and ban them from future securities-related activities.

Benteng said in a Monday filing that Zhang Xiaomin is now Benteng’s chairwoman, while Zhang Yuda’s position is unclear. The company added that it is aware of the CSRC’s conclusions and will ask for the case to be reviewed.

Contact reporter Zhao Runhua (runhuazhao@caixin.com)

A Chinese battery-maker wants to cushion its cash pile by raising funds on the country’s new Nasdaq-style stock market, as the company appears on track to post a second straight year of losses amid Beijing’s ongoing phase-out of electric vehicles subsidies.

Farasis Energy (Gan Zhou) Co. Ltd. has been accepted for a Shanghai high-tech board listing to offer 214.1 million shares of its stock, according to a company prospectus filed to the Shanghai Stock Exchange on Tuesday. The company said it plans to plow the proceeds into its lithium-battery production project and other operating expenses.

After deducting gains from extraordinary items such as investment products, Farasis posted a net loss of 21.8 million yuan ($3.1 million) in the first half of this year, according to the prospectus. The company made a loss of 198.8 million yuan in 2018, compared with a profit of 9.3 million yuan the year prior.

China’s EV market has slowed this year after the central government announced a plan to phase out subsidies in a bid to consolidate the industry. But that has also hurt the earnings of the battery-makers that power such vehicles.

In July and August, China’s overall sales of new energy vehicles — a category that includes battery-powered pure-electric and hybrid-electric cars — contracted for the first time since January 2017.

Read the full story on Caixin Global later today.

This article has been corrected to say that Farasis has been accepted for a listing.

Contact reporter Tang Ziyi (ziyitang@caixin.com)

Terry Gou, the billionaire founder of Taiwan-based electronics behemoth Foxconn, has unexpectedly dropped his bid to become the island’s next leader just days after his formal withdrawal from an opposition party sparked speculation that he planned to run as an independent.

In a statement released by his office late on Monday night, Gou said he originally ran for election in the hope of uniting Taiwan society around the economy. “But since launching my campaign, I’ve seen some politicians fan populism by appealing to class, hate, and confrontation, for the sake of their own private interests,” he said.

Gou questioned whether those issues would disappear if he ran for the presidency or abandoned his bid, adding that he hoped that Taiwan could return to a “rational” policy debate when it chooses its next leader in January.

Gou would continue to engage with Taiwan politics and promote his policies, the statement added.

On Thursday, Gou formally renounced his membership of the Kuomintang (KMT), the opposition party under whose name he launched his leadership bid. The move had fueled rumors that he might run as an independent.

The firebrand businessman-cum-politician has been a divisive figure in the run-up to Taiwan’s elections, for example when he claimed after defeat in the KMT primary that the selection was biased toward the eventual winner, Han Kuo-yu.

Contact reporter Matthew Walsh (matthewwalsh@caixin.com)

Related: Terry Gou-Backed LCD Panel Plant Seeks Cash Injection

The southern Chinese city of Shenzhen on Monday passed a draft policy that would require all new vehicles registered for ride-hailing services to be fully electric, local state-run publication Shenzhen Special Zone Daily reported.

The move comes as several Chinese cities seek to phase out vehicles that run on fossil fuels in a bid to boost electric-vehicle uptake and cut air pollution. Last year, the southwestern city of Kunming announced a similar plan to make all new ride-hailing vehicles run purely on electricity in 2019. The report did not give a timeframe for Shenzhen’s transition.

Shenzhen’s draft rules also include a host of other measures. In order to protect consumer rights, ride-hailing companies would be required to transparently display their pricing rules and the number of vehicles available within a three-kilometer radius of users. Chinese media outlets have previously reported that some ride-hailing companies use internal algorithms to charge varying fees for similar trips depending on users’ personal profiles.

Currently, 17 ride-hailing companies have received permits to operate in Shenzhen, but only 10 have formally launched their services, according to the Shenzhen Special Zone Daily. The city currently has around 58,000 registered ride-hailing vehicles.

Contact reporter Zhao Runhua (runhuazhao@caixin.com)

Related: Shanghai Threatens Didi With App Removal as Ride-Hailing Violations Mount

Suning.com, the buyer of French retailer giant Carrefour’s Chinese business, is making a major business push three months after announcement of the acquisition.

On Sept. 28, the company plans to open more than 200 in-Carrefour Suning stores across China to sell home appliances and electronic products, Caixin has learned. Suning tailored each store’s sales plan based on store locations and consumer profiles, the company said. Products sold in the in-Carrefour stores will also be qualified for Suning’s own customer services, the company said.

In June, Carrefour announced that Suning would buy an 80% stake in its China business for about $700 million. In August, Suning said the deal received a green light from agencies in charge of anti-monopoly review and would then proceed to completion.

Nevertheless, the in-Carrefour business model is not Suning’s innovation. As e-commerce platforms become popular and online channels continue to squeeze physical appliance and electronic product stores’ profit margins, stores are turning to supermarket chains to open in-supermarket shops, which are often smaller than their general venues but are more flexible on product options and business strategies.

Experts called Chinese tech giant Huawei’s offer to license 5G technologies to the U.S. a “smart public relation move.”

In an interview with the Economist posted Monday on the internal online community of Huawei Technologies Co., Chief Executive Ren Zhengfei extended an olive branch to the U.S. government by offering its 5G technology for licensing.

Ren said Huawei is open to sharing its 5G technologies with U.S. companies so that they can build up their own 5G industry. “That would create a balanced situation between China, the U.S. and Europe,” Ren said in the interview.

Through licensing its 5G technologies, Huawei can not only enter the U.S. and Australian markets that have barred the company but also display to the world Huawei’s willingness to cooperate, contrary to the U.S. government’s attitude, said Douglas Fuller, associate professor in the department of Asian and international studies of the City University of Hong Kong and an expert on China’s tech industry.

No single company including Huawei holds all the patents needed to build 5G devices, and all companies need cross-licensing, Fuller said. Therefore, he said he doesn’t think Huawei’s proposal is a game-changer.

Even if one company wants to buy 5G technologies from Huawei, it still needs to obtain licenses from other players, which is costly, Fuller said.

“Unless Huawei prices its license fee very low, very few companies would actually buy them,” Fuller said.

Contact reporter Denise Jia (huijuanjia@caixin.com)

It may be known for its financial prowess, but now Shanghai is trying its hand in the high-tech realm with plans to take the lead in autonomous driving.

The city has become China’s first to issue licenses to intelligent connected vehicle (ICV) companies, allowing them to pilot autonomous driving projects in real urban scenarios, local government officials announced on Monday during the World Intelligent Connected Vehicles Conference. Such tests are a crucial step before things like commercial robotaxis can go into service.

Car makers SAIC Motor and BMW, as well as the Uber-esque Didi Chuxing, are becoming the first companies to receive such licenses, and will roll out related projects in the city’s Jiading district, the government said.

Licensees can run pilot programs including robotaxis, unmanned delivery or other autonomous driving tasks with special purposes, in designated locations, according to an earlier interim document, which is also the guidance document of the pilot projects. The robotaxis, mostly relying on automation, require a driver present as a precaution and also require that passengers sit in the back seats with seat belts fastened, said the government.

The pilot projects should charge no fees to passengers, and are prohibited from operating commercial businesses, the document said. It added that the licenses will be suspended or cancelled if any test vehicles, during rides with real passengers, violate major traffic regulations or get in severe accidents that cause casualties.

Chinese transport-tech companies are busy preparing to roll out robotaxi projects in a year or two. Supporting polices can accelerate the process by helping vehicles adapt to real road situations, though many netizens doubt whether the projects are practical.

Related: Next Year Will Be Key for Robotaxi Industry, Startup Says

A senior Chinese government official has urged the country to press forward with the development of technology infrastructure in Xiongan New Area, in a bid to create a “smart brain” that will transform the future planned new high-tech industrial hub into an information, supercomputing, and big-data hub.

Wang Dongfeng, the Communist Party secretary of North China’s Hebei province, where Xiong an is located, made the comments at a series of meetings held Friday and Saturday in the area, local paper Hebei News reported. Wang name-checked a slew of technologies, including 5G telecommunications bases, satellite-information transmission, sensor systems, and broadband, that will “establish standard systems for a healthy smart city,” the report said.

Wang’s comments come several months after the government began acquiring land from local residents in May. Officials hope that Xiongan, which is situated in what is now a rural area some 100 kilometers (62 miles) southwest of Beijing, will take on some of the capital’s nonessential administrative roles, integrate the region into a vast urban area stretching from Beijing to the port city of Tianjin, and help Hebei transition away from the heavily polluting industries it now relies on, like steel.

But opponents claim the initiative, which officials announced in April 2017 and have called “the project of the millennium,” will destroy fragile wetlands and threaten the survival of local culture.

Contact reporter Matthew Walsh (matthewwalsh@caixin.com)

Related: Gallery: China’s Newest Special Economic Zone Moves Ahead

Reports that Apple’s latest iPhones are meeting with lukewarm response in Asia may be premature, at least if activity on China’s No. 2 e-commerce platform JD.com is any indicator.

More than 1 million iPhone 11 handsets have been reserved on JD.com since preorders began on Friday, according to a Saturday post on the Chinese online retailer’s official Weibo social media account. It said such preorders at that time represented a 480% surge from iPhone presales as of this point last year.

The most popular models include the iPhone 11 Pro in “midnight green,” as well as the black and purple editions of the standard iPhone 11, the company said. The first order was placed within one second of the acceptance of orders, and stocks of the Pro were completely snapped up within five minutes.

According to JD.com, younger people placed the vast majority of orders for the phones, which will officially become available on Friday. Around 59% of preorder customers were between 16 and 29 years old, while people in their thirties accounted for nearly a third of the total.

The much-anticipated smartphone, which features design tweaks, a brand-new camera array, and a faster processor, retails on Apple’s authorized JD.com page from 5,499 yuan ($778) for a standard iPhone 11, up to a wallet-busting 12,699 yuan for a top-of-the-line iPhone 11 Pro Max.

Although that’s cheaper than last year’s iPhone XR, Chinese consumers must still shell out a premium of between 10.5% and 12.5% for the iPhone 11 compared with U.S. prices, and between 18.6% and 23% for the iPhone 11 Pro and Pro Max, according to an analysis by CNBC.

Unlike new smartphone models from domestic competitors Huawei and Xiaomi, the new iPhone also lacks 5G capabilities at a time when China is accelerating the rollout of the potentially revolutionary technology.

Contact reporter Matthew Walsh (matthewwalsh@caixin.com)

Related: Chinese Netizens Cheer as Apple Compares Itself With Huawei for the First Time

China’s annual national internet safety week has kicked off with a report on the lamentable state of data protection in the country.

According to the National Computer Virus Emergency Response Center (CVERC), China’s official agency for anti-virus internet security, several apps, including some backed by the country’s internet giants, are collecting user data without authorization, state broadcaster CCTV reported Sunday.

Iciba, one of the country’s most-downloaded digital dictionaries; iWan, Tencent’s gaming service app; Moji Weather, a popular forecasting app; and Fenqibao, an online micro-lending and paid-in-installments shopping app, all fail to specify the terms of data collection terms in their user agreements, CVERC said.

Meanwhile, dating app Momo, Bytedance-owned news aggregator Jinri Toutiao, e-commerce giant JD.com’s financial services app, and a UnionPay-backed mobile payment app are all suspected of harvesting user information beyond that specified in their user agreements, according to CVERC.

Other apps and software development kits may also be charging illegal service fees, damaging smartphone operating systems, or harboring severe vulnerabilities, CVERC said.

In August, the Chinese government published a draft regulation aiming to standardize data collection amid increasing public concern about online data leakage. A report published later the same month showed that many mobile apps continued to illegally acquire user information.  

Contact reporter Zhao Runhua (runhuazhao@caixin.com)

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U.S. President Donald Trump recently tweeted that he suspects China is secretly hoping to win the prolonged trade war by waiting until after next year’s presidential election and then negotiating a better deal with a new Democratic administration.

But he’s wrong. In Beijing’s eyes, the difficulty of reaching a trade deal with the U.S. has nothing to do with the American election cycle. Instead, Washington’s unacceptable demands make it impossible for the Chinese government to compromise.

And there’s no assurance that the 2020 race won’t elect an even more economically protectionist candidate. Beijing has already been alarmed by worrisome messages from some progressive Democratic hopefuls, including U.S. Senator Bernie Sanders and his fellow senator, Elizabeth Warren.

Read the full piece on Caixin Global later today.

Contact writer Lu Zhenhua (zhenhualu@caixin.com)

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