Hello, Kenji from Hong Kong right here. Mainland China (and Japan, too, for a distinct purpose) is on a five-day vacation, however there are not any breaks within the information circulation. Please take a look at our Big Story on how China is build up its personal chip trade beneath US strain. US allies, specifically India and Japan, are taking steps to additional shun 5G and drones from China (Mercedes’ high 10). But we don’t solely comply with China. I’m certain you’ll benefit from the Spotlight this week on VNG, the primary unicorn in Vietnam. Hope you keep secure.

The Big Story — Exclusive

China is implementing a largely secret technique for chip self-reliance. The case examine of Yangtze Memory, considered one of China’s main semiconductor corporations, reveals the depth of Beijing’s willpower to scale back its reliance on US suppliers, in accordance with this exclusive in Nikkei Asia.

Key factors: Once a month, senior executives of Yangtze Memory — additionally known as YMTC — have been flying to Beijing for conferences with China’s high financial administration our bodies. Part of the main target is a programme geared toward weaning the Chinese firm off US know-how.

The programme has occupied over 800 folks full-time, and included employees from its a number of native suppliers, for two years.

It’s goal is to be taught as a lot as doable concerning the origins of all the things that goes into YMTC’s merchandise, from manufacturing tools and chemical substances to the tiny lenses, screws, nuts and bearings in chipmaking equipment and manufacturing strains, a number of sources accustomed to the matter stated. At every stage, native suppliers — or at the least non-US ones — are being sought to switch American opponents.

Upshot: The US-China tech rivalry has centered largely on Washington’s efforts to decouple from China. But the instance of YMTC exhibits the detailed depth of China’s personal decoupling technique, which stays largely secret.

Mercedes’ high 10

  1. The woes of China’s Big Tech corporations are removed from over. Chinese officers have focused extra corporations in the fintech sector.

  2. Beijing’s crackdown might additionally hit the fortunes of Tencent Music, which can have to surrender unique music rights and promote essential apps.

  3. India has snubbed Huawei because it named Ericsson, Nokia and Samsung to hold out 5G telecoms trials with tools makers.

  4. TikTok, the Chinese-owned viral video app, has a new boss. Shouzi Chew, ByteDance chief monetary officer, is taking on as chief govt primarily based in Singapore.

  5. Asian start-ups from Indonesia to Japan are getting the bounce on governments and creating their very own vaccine passports.

  6. Another large meals supply app is ready to IPO. Will India’s Zomato go the best way of Deliveroo within the UK or DoorDash within the US on its debut?

  7. Japanese infrastructure corporations are ending their use of Chinese-made drones over security risks.

  8. The firm behind the robotic vacuum Roomba is cutting ties with its Hong Kong developer, an indication of the occasions amid USChina tensions.

  9. Meanwhile, Taiwan took the drastic step of banning recruitment for jobs in China to stop the outflow of significant tech expertise to the mainland.

  10. Dating apps are revolutionising romance in India, a land of organized marriages.

Mascots of Tencent Music, the US-listed Chinese firm that might be hit by Beijing’s crackdown on know-how teams © Reuters

When sages converse

  • China deployed the primary module of its house station final week, cementing its standing as a number one house energy. But the launch marked a mere stepping stone towards attaining better ambitions in house, write Matthew Funaiole and Brian Hart at CSIS, a Washington-based think-tank.

  • Stanford University’s DigiChina dream group have done a big service in parsing Beijing’s newest draft of its premier knowledge privateness regulation. Hat tip to Alexa Lee, Samm Sacks, Rogier Creemers, Mingli Shi and Graham Webster.

Our take

The rescue of the defunct Peking University Founder Group is a telling episode of how issues work in China. After the shocking chapter of the tech-to-finance-to-health care conglomerate backed by nation’s high college in February final 12 months, court-designated directors chosen Ping An Insurance and two native authorities corporations as joint sponsors.

Last week, the sponsors agreed to pay as much as $11.3bn to reboot the state conglomerate as “New Founder Group”. Ping An is footing many of the invoice. But the corporate stated its participation within the restructuring of the high-profile state-owned enterprise was meant partly to reinforce its “corporate reputation”. Interestingly, Founder Microelectronics, a gem of the bankrupt group’s chip producer, has been hived off from the deal and is being offered to a Shenzhen authorities funding arm.

The directors — consisting of the central financial institution, schooling ministry, monetary regulator and Beijing metropolis authorities — could have thought the deal was fabulous because it cleared away dangerous money owed from Peking University, utilizing largely non-public cash. The objection, although, got here from the Hong Kong inventory market. The share worth of Founder Holdings, one of many listed models of the college group to be rescued, nearly doubled instantly following the announcement. Ping An, alternatively, misplaced 2.5 per cent.

— Kenji

Spotlight

Vuong Quang Khai is regionally often known as the “father of Zalo”, Vietnam’s hottest chat app. Its dominance is a part of the explanation VNG, a gaming start-up-turned-tech conglomerate and the south-east Asian nation’s first unicorn, has been so profitable.

Over the previous decade and a half, VNG has diversified into cloud computing, adverts, digital funds and media and has constructed up one of many greatest digital person bases in Vietnam. Khai, govt vice-president at VNG and a Columbia-educated pc scientist, is main its push into synthetic intelligence. “If we don’t keep up with the next wave, we could become irrelevant,” Khai stated.

One flagship product is Kiki, an AI voice assistant. Zalo is in talks with a number one dashboard firm, which Khai declined to call, to unveil Kiki for the mass automotive market by the third quarter of 2021. His group’s AI work ranges from facial recognition, utilized by Viet Capital Bank to confirm purchasers, to Kiki’s playlist, which was educated by way of the large track library of one other VNG enterprise, Zing Music.

Art of the deal

JD Logistics
JD Logistics was China’s largest built-in supply-chain logistics providers participant by income in 2019 © Reuters

Just when it felt like Hong Kong’s roaring inventory market was displaying indicators of fatigue, in swans JD Logistics with a deal to lift about $4bn in an preliminary public providing.

The IPO will see the logistics unit of JD.com, considered one of China’s greatest tech corporations, valued at about $40bn, according to this piece in Nikkei Asia. JD Logistics acquired the nod from the bourse’s itemizing committee final week and has kicked off investor conferences. JD.com and its healthcare enterprise JD Health are each already listed on HKEX.

JD Logistics was China’s largest built-in supply-chain logistics providers participant by income in 2019, in accordance with the IPO utility. And whereas the corporate’s revenues have soared, it’s not worthwhile. It posted a web lack of Rmb2.8bn ($433m) in 2018, Rmb2.2bn in 2019 and Rmb11.7m within the first 9 months of 2020, in accordance with the prospectus.

Smart knowledge

Lex: Apple

This chart exhibits Apple’s resurgence within the international smartphone market — and Huawei’s drastic decline. The creation of 5G providers final 12 months was presupposed to mark a coming of age for the Chinese trade chief, however concerted US strain on its provide chain has slashed the variety of smartphones it’ll ship this 12 months.

Chinese challengers Xiaomi, Oppo and Vivo have all overtaken Huawei in smartphone gross sales in 2021. But there’s nonetheless vital daylight between the main challenger, Xiaomi, and Apple. The iPhone maker can also be producing enormous quantities of money, permitting it to proceed its aggressive share buyback programme.



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