Whats up from Hong Kong — my identify is Eli, and I’m a publication author and editor for the FT, standing on this week for Mercedes, who’s taking a well-earned break. She has graciously left us with our Large Story, a collaboration with James and Stephanie Findlay in New Delhi on how nationalist fervour in India is popping towards Chinese language buyers — creating a gap for US tech corporations to steal a march on their rivals.
The TikTok tumult remained on the prime of the geopolitical agenda, with Donald Trump unexpectedly backing a proposed takeover by Microsoft — however with some curious caveats, together with an unheard-of kickback for the US Treasury (High 10). One of many beneficiaries: Japan’s Line. Not so merry: LinkedIn, the most recent sandbox for Chinese language espionage (each High 10).
Don’t miss Henny Sender’s evaluation of how China’s central financial institution is popping to a digital forex to rein in its personal dominant tech giants (Better of Remark). The way forward for batteries is rising in Japan — and it seems to be supercharged (Sensible knowledge). It’s been a pleasure to fulfill you. Let’s get to it.
The Large Story
India is changing into the primary massive abroad battleground within the US-China tech warfare. US massive tech corporations are making floor towards Chinese language rivals as anti-Chinese language sentiment bristles following a brutal border conflict, in line with this evaluation within the Monetary Instances.
An explosion of Chinese language enterprise capital investments — amounting to $4.3bn for the reason that begin of 2017 — is wanting more and more uncovered and new Chinese language offers are at a standstill. In contrast, US enterprise capital and M&A inflows are surging.
Key implications: China’s dominance of India’s tech start-up scene has hitherto been robust. Seven out of India’s prime 10 unicorns are backed by a Chinese language strategic investor versus just one backed by a US counterpart. However a coverage shift for the reason that border conflict in June imperils China Inc’s place.
Scores of Chinese language apps — together with TikTok, WeChat, Weibo and others — have been banned by New Delhi. Google Pay, in the meantime, has emerged because the main funds app in India whereas earlier market chief Paytm, a $16bn start-up backed by Alibaba, is languishing.
Upshot: Large US tech — together with Google, Fb, Amazon and others — is seeing India as an El Dorado and gaining floor on Chinese language rivals. However India’s market is rarely simple. The trials of Vodafone and Cairn Power ought to stand as cautionary tales. Additional studying right here.
Eli’s High 10
A round-up of the week’s prime tales from FT publication author Eli Meixler
In a dramatic U-turn, Donald Trump authorized Microsoft’s proposed takeover of TikTok’s US operations — however demanded a September 15 deadline and a “very massive” minimize for the Treasury. Quite a few technical and political hurdles stay, not least the worth for the Chinese language-owned video sharing app. Don’t miss the FT’s Yuan Yang on why Beijing received’t come to bat for TikTok because it has for Huawei.
Ant Group, the fintech arm of Chinese language ecommerce big Alibaba, is seeking to elevate $30bn in a deliberate IPO, Caixin reported, citing sources. The share sale in Shanghai and Hong Kong would edge out Saudi Aramco for the biggest ever.
We have now a purchaser: US chip firm Nvidia is in talks to purchase Arm from SoftBank in a deal that will worth the UK chip designer at greater than $32bn and consolidate Nvidia’s place on the centre of the semiconductor business.
The geopolitical blowback towards Chinese language apps — together with TikTok and WeChat — is sending customers scrambling to Japan’s Line. NAR has extra.
“Would you want to affix my skilled community on LinkedIn?” Not so quick — your new connection could possibly be a Chinese language spy. The FT has the yarn.
However there could possibly be an answer: Japan Inc is hiring hackers — “white hats”, that’s, or moral hackers that probe for vulnerabilities earlier than malicious attackers discover them.
The Philippines goes 5G, with telecoms chief PLDT launching a next-generation community with assist from each China‘s Huawei and Sweden‘s Ericsson.
Sticking with Huawei, the Chinese language big topped Samsung in quarterly smartphone shipments for the primary time — however it’s a fragile world chief, NAR writes, as US strain cuts into its share of abroad markets.
Japan’s seismologists have taken a shine to synthetic intelligence (see illustration) and machine studying, amid hopes of at some point predicting large quakes, writes the FT’s Leo Lewis.
What pandemic? Singapore is planning a fintech competition — each in individual and at an “on-line metropolis” — in December. Final yr’s occasion drew 60,000. Convey your individual face masks.
When sages communicate
It’s troublesome to have a dispassionate debate about Huawei as of late, write Scott Kennedy and Shining Tan at CSIS, particularly due to “inadequate familiarity with how Huawei has grown and developed”. Right here’s a primer.
India’s ban of 59 Chinese language apps lifted a web page from Beijing’s personal Nice Firewall, writes Matt Sheehan at MacroPolo. Might it likewise incubate home Indian start-ups by walling off worldwide rivals?
Sheena Greitens on the College of Texas, Austin dismantles a latest Atlantic article on Chinese language AI and surveillance on this knowledgeable Twitter thread.
In case you missed it: #techAsia’s Mercedes Ruehl spoke with Rui Ma, co-founder of the Tech Buzz China podcast, about the way forward for TikTok and ByteDance in a LinkedIn Reside video chat. Watch it right here.
Better of remark
China’s central financial institution can also be seeking to break up home Large Tech dominance — with a digital forex, writes Henny Sender. The experimental digital forex is on trial in a lot of Chinese language cities and the PBoC intends to make use of it to simplify digital funds and interbank settlements.
Regulators and executives at Ant, Alibaba’s monetary affiliate, stated PBoC officers have Alipay and WeChat Pay, the dominant digital funds platforms, firmly of their crosshairs.
“It’s in regards to the function of a digital forex for home retail use,” stated a senior govt on the Hong Kong Financial Authority accustomed to the pondering on the PBoC. “They need a extra degree taking part in discipline for the banks. Retail funds are so dominated by Alibaba and Tencent whereas banks are much less lively in digital funds.”
Christian Klein, 40, took over as the only real boss of SAP, Europe’s largest software program firm, in April. However he isn’t proud of the continent’s expertise pool.
Europe “has to do higher” if it desires to compete with Asia and the US, he stated. Earlier this yr the European Fee unveiled a plan to spice up the bloc’s tech sovereignty and be sure that it might probably compete with the US and Asia in synthetic intelligence and the evaluation and use of information. Europe can also be planning to construct its personal community of cloud computing and knowledge companies, named Gaia-X, that will probably be protected by EU legal guidelines and supply an alternative choice to the US suppliers Amazon, Microsoft and Google.
Moreover, Brussels has stated it can spend €600m to coach greater than 250,000 folks throughout Europe with superior tech abilities.
Artwork of the deal
Hong Kong’s Li & Fung, the world’s largest sourcing firm, has tapped Chinese language ecommerce big JD.com for a $100m funding to convey its world provide chain enterprise on-line.
Is the following gaming growth frontier . . . Turkey? Perhaps so: US gaming group Zynga acquired the nation’s first unicorn, Peak Video games, for $1.85bn, following purchases by Tencent and South Korea’s Netmarble.
Japan’s Line is taking a chew out of Thailand’s meals supply market, elevating $110m funding from BRV Capital Administration and a merger with a neighborhood restaurant aggregator to tackle the likes of Seize and Go-Jek.
Seize can also be on the transfer, elevating $200m, half from South Korean personal fairness agency Stic Investments, and launching shopper monetary merchandise together with micro-investments, loans, medical health insurance and a pay-later programme.
Oyo, the SoftBank-backed Indian start-up is merging its hotel-booking and apartment-rental operations in Japan. In the meantime, Oyo founder Ritesh Agarwal has arrange a brand new VC agency to speculate as much as $5m in start-ups.
Chinese language EV start-up Li Auto revved its engines and took off in a profitable debut on the Nasdaq final week that raised $1.1bn as shares soared 43 per cent.
A brand new battery era is dawning in Japan. It seems to be vibrant — and long-lasting. From smartphones to drones to electrical automobiles, the usual is at present lithium-ion, however Japanese start-ups are designing new high-performance energy packs with 10 occasions extra vitality.
Rechargeable batteries are a longstanding energy of Japan’s company tech, however the sector has come up towards tenacious Chinese language and South Korean competitors. Now, Japan’s hopes of remaining atop a market anticipated to be price greater than $25bn by 2035 relaxation on its engineers — and their potential to churn out a brand new normal in lithium-metal batteries.