Tag Archives: Chinese
HONG KONG/BEIJING (Reuters) – The SoftBank-led Vision Fund is in talks to invest up to $ 1.5 billion in Chinese used car trading platform Guazi.com, two people with knowledge of the matter said.
That would mark the latest Chinese deal by the mammoth $ 100 billion investment fund as it looks to expand in the world’s No.2 economy, and would come after it invested 460 million euros in German used car dealing platform Auto1.
The fund is likely to invest up to $ 1.5 billion in Guazi in a deal that would value the firm at $ 8.5 billion before the investment, according to one of the sources, who had direct knowledge of the situation.
The two sources, who were not authorized to speak to media, also said the Vision Fund had in the past few months held talks with Guazi’s direct rival, Renrenche, which is backed by Chinese ride-hailing firm Didi Chuxing.
Guazi, a consumer-to-consumer used car trading platform founded in 2014, is backed by Chinese internet giant Tencent and Sequoia Capital China. Its talks with Softbank were first reported by the Financial Times late on Friday.
The Vision Fund and Renrenche declined to comment. Guazi did not respond to a request for comment. Japan’s Softbank was not immediately available for comment.
The Vision Fund, the world’s largest private equity fund after raising more than $ 93 billion in 2017, has previously made investments in firms such as ride-hailing company Uber Technologies Inc and shared-office space firm WeWork.
China’s used car market has continued to grow even as overall auto sales declined last year for the first time since the 1990s.
Used sales rose 11.5 percent in 2018 from the year before to 13.82 million vehicles. The total value of these transactions was 860.4 billion yuan ($ 127.61 billion), according to the China Automobile Dealers Association.
China’s state planner has said the country would aim to loosen restrictions on the second-hand auto market, with “appropriate” subsidies provided to boost rural sales of some vehicles.
Reporting by Julie Zhu in Hong Kong and Yilei Sun in Beijing, additional reporting by Junko Fujita in Tokyo; Editing by Joseph Radford
SAN FRANCISCO (Reuters) – More than 200 engineers, designers and managers at Alphabet Inc’s Google demanded in an open letter on Tuesday that the company end development of a censored search engine for Chinese users, escalating earlier protests against the secretive project.
FILE PHOTO: Google’s booth is pictured at the Global Mobile Internet Conference (GMIC) 2017 in Beijing, China April 28, 2017. REUTERS/Jason Lee/File Photo
Google has described the search app, known as Project Dragonfly, as an experiment not close to launching. But as details of it have leaked since August, current and former employees, human rights activists and U.S. lawmakers have criticized Google for not taking a harder line against the Chinese government’s policy that politically sensitive results be blocked.
Human rights group Amnesty International also launched a public petition on Tuesday calling on Google to cancel Dragonfly. The organization said it would encourage Google workers to sign the petition by targeting them on LinkedIn and protesting outside Google offices.
Google declined to comment on the employees’ letter on Tuesday as Alphabet shares fell 0.35 percent to $ 1,052.28.
Google has long sought to have a bigger presence in China, the world’s largest internet market. It needs government approval to compete with the country’s dominant homegrown internet services.
An official at China’s Ministry of Industry and Information Technology, who was unauthorized to speak publicly, told Reuters on Tuesday there was “no indication” from Google that it had adjusted earlier plans to eventually launch the search app. However, the official described a 2019 release as “unrealistic” without elaborating.
About 1,400 of Google’s tens of thousands of workers urged the company in August to improve oversight of ethically questionable ventures, including Dragonfly.
The nine employees who first signed their names on Tuesday’s letter said they had seen little progress.
The letter expresses concern about the Chinese government tracking dissidents through search data and suppressing truth through content restrictions.
“We object to technologies that aid the powerful in oppressing the vulnerable, wherever they may be,” the employees said in the letter published on the blogging service Medium.
The employees said they no longer believed Google was “a company willing to place its values over profits,” and cited a string of “disappointments” this year, including acknowledgement of a big payout to an executive who had been accused of sexual harassment.
That incident sparked global protests at Google, which like other big technology companies has seen an uptick in employee activism during the last two years as their services become an integral part of civic infrastructure.
Reporting by Paresh Dave in San Francisco; Additional reporting by Cate Cadell in Beijing; Editing by Jonathan Oatis and Tom Brown
BRUSSELS (Reuters) – The European Commission is set to propose final duties to curb cheap imports of Chinese electric bicycles that European producers say are benefiting from unfair subsidies and flooding the European Union market.
FILE PHOTO – A man rides an electric bicycle, also known as an e-bike, in downtown Milan, Italy, May 18, 2018. REUTERS/Stefano Rellandini
The Commission, which is investigating on behalf of the 28 EU members, believes that definitive or final tariffs of between 18.8 and 79.3 percent should apply for all e-bikes coming from China, according to a “disclosure document” seen by Reuters.
Taiwan’s Giant, one of the world’s largest bicycle makers, which has factories in China as well as in the Netherlands, would be subject to a rate of 24.8 percent.
The rates are slightly lower than the provisional duties of between 21.8 and 83.6 percent set in July.
The anti-dumping and anti-subsidy duties are the latest in a series of EU measures against Chinese exports ranging from solar panels to steel, which have sparked strong words from Beijing.
The EU shares U.S. concerns about technology transfers and state subsidies but does not advocate a trade war. The United States has imposed tariffs on $ 250 billion worth of Chinese goods, and Beijing has responded with retaliatory duties on $ 110 billion worth of U.S. goods, although the two are in talks.
The definitive duties on e-bikes need to be approved by EU countries and would need to be in place by Jan. 18. They typically apply for five years. Interested parties have until Nov. 26 to comment on the Commission’s plans.
The Commission found Chinese exports of e-bikes to the European Union more than tripled from 2014 until September 2017. Their market share rose to 35 percent, while their average prices fell by 11 percent.
It has also said Chinese producers benefit from controlled aluminum prices and advantageous financing and land rights conditions and tax breaks.
The European Bicycle Manufacturers Association, which brought the case, welcomed the sign of the Commission’s intent, saying the investigations had proven Chinese e-bikes were flooding the EU market at artificially low prices, supported by subsidies.
Trade measures, it said, would shield 90,000 EU workers and over 800 small and medium companies against unfair competition.
EU producers include Dutch groups Accell and Gazelle, Romania’s Eurosport DHS and Germany’s Derby Cycle Holding.
LEVA-EU, a group opposed to measures, said the proposed duties would exacerbate damage already done to European importers and mark the start of “dark days” for the whole European electric bicycle sector, including consumers.
Reporting by Philip Blenkinsop, editing by Larry King
HANGZHOU, China (Reuters) – Humming away in an industrial estate in the eastern Chinese resort city of Hangzhou, electric vehicle designer Automagic is one of hundreds of companies looking to ride the country’s wave of investment in clean transportation.
The company wants to find a niche in a crowded sector that already includes renewable equipment manufacturers, battery makers and property developers like the Evergrande Group, as well as established auto giants.
But not all of these electric vehicle hopefuls will make it to the finish line.
“This (large number of firms) is inevitable, because whenever there is an emerging technology or emerging industry, there must be a hundred schools of thought and a hundred flowers blooming,” said Zhou Xuan, Automagic’s general manager, referring to Chinese leader Mao Zedong’s ill-fated 1956 “Hundred Flowers” campaign aimed at encouraging new ideas.
China is using preferential policies and brute manufacturing power to position itself at the forefront of global efforts to electrify transportation. By the end of 2017, ownership of new energy vehicles (NEV) – those powered by fuels other than petrol – reached 1.8 million in China, over half the world’s total.
With market expectations high, Chinese EV maker NIO, a rival to Tesla, launched a high-profile IPO in New York last month.
In July, the industry ministry published a list of 428 recommended NEV designs built by 118 enterprises throughout the country. It included not only established carmakers like FAW Group and Geely Automobiles, but also small, new entrants with names like Greenwheel, Wuhu Bodge Automobiles and Jiangsu Friendly Cars.
But regulators are already concerned about overcapacity and “blind development.” As subsidies are cut, smaller start-ups need to develop a competitive edge.
“After a period of intense competition, the rocks will appear, and the weak will be consolidated or eliminated,” Zhou said.
Overcapacity has been a persistent concern for many Chinese industries, with thousands of firms, backed by growth-hungry local governments and supported by risky loans, expanding quickly.
Over the years, China has been forced to take action against price-sapping supply gluts in steel, coal and solar panels, among others.
Electric vehicles could be next, as local governments feel pressure to create champions while following state instructions to “upgrade” their heavy industrial economies.
Some executives say the market is already distorted by subsidies granted to inefficient and poorly performing firms.
“Right now, the rapid growth of NEVs is not a market choice but government-guided behavior, with growth stimulated by subsidies,” said Li Lei, deputy director of the new energy department of Jiangxi Dacheng Autos, a new joint venture carmaker in eastern China’s Jiangxi province.
Though sales soared 88 percent in the first eight months of 2018, hitting 601,000 units, the National Development and Reform Commission (NDRC) has promised to tackle irrational growth in the sector.
In draft rules released this year, it said it would “plan and arrange the new energy vehicle industry scientifically,” and block new production capacity in regions where the utilization rate was less than 80 percent.
But China has often relied on “strategic” supply gluts to boost competitiveness. Excess production in solar power forced producers to reduce costs and compete, subsidy-free, with conventional energy sources.
Liu Xiaolu, sales manager with ICONIQ Motors, a Tianjin-based luxury electric vehicle maker, said the large number of companies could be a “necessary stage” of development for the sector.
“You cannot say that 20 enterprises will definitely be able to develop the entire industry by themselves, and it probably needs everyone to come together, and then gradually get eliminated afterwards,” he said.
Established automakers told Reuters they’d already had plenty of time to prepare for the shift towards electric transportation.
Xu Hongfei, general manager with Zotye Automobile, a mid-sized Chinese automaker, said it had been preparing for China’s “exit schedule” from traditional vehicles for more than a decade and had developed core technologies such as batteries.
With a staff of 20, Automagic was founded in 2015 by former engineers from IBM and Geely. It is talking with partners to bring its models to the market.
The company is focusing on small, short-distance family vehicles rather than large-scale cars built by the likes of BYD. It is also seeking better ways to produce, recharge and recycle batteries.
“The most important point is that new energy vehicles need to be energy efficient, with low energy consumption, so we focus on cutting weight and making cars smaller so battery use can be reduced,” said Zhong Jin, Automagic’s co-founder and chief executive.
GCL, one of China’s biggest renewable developers, plans to turn its “new energy town” at Jurong in Jiangsu province into a major manufacturing center with its expertise in batteries and recycling expertise, and even create a battery rental system.
Although all the companies are trying to get an edge through innovation, Li of Jiangxi Dacheng said success could simply come down to market positioning.
“Our company doesn’t have any very big advantages or very big disadvantages and competition is dependent first on branding, second on financing, and third on sales channels,” he said.
Additional reporting by Shanghai newsroom; Editing by Gerry Doyle
(Reuters) – Chinese online group discounter Pinduoduo is planning to raise up to $ 1.63 billion from a U.S. listing, its latest filing with the U.S. Securities and Exchange showed, in what will be one of the biggest U.S. float by Chinese firms in four years.
Pinduoduo, owned by Walnut Street Group, plans to sell about 85.6 million American Depositary Shares in its initial public offering (IPO) at a price range of $ 16 to $ 19 each, according to its filing, which was uploaded to the exchange website on Monday.
The company, backed by Chinese internet giant Tencent Holdings, will open the book to institutional investors on Tuesday and price its IPO next Wednesday, said two people close to the transaction.
Pinduoduo expects to list on the Nasdaq under the symbol “PDD.”
The company is the latest in a series of Chinese tech groups flocking to list in New York or Hong Kong, seeking to replenish its coffers amid the fierce competition with domestic rivals, notably e-commerce giants Alibaba and JD.com, even as trade tensions between China and the United States rattle global markets.
China’s Meituan Dianping, an online food delivery-to-ticketing services platform which rivals Alibaba-backed food-delivery peer Ele.me, is also looking to launch its IPO of over $ 4 billion in Hong Kong in coming months.
Loss-making Pinduoduo, set up by former Google engineer Colin Huang in 2015, also counts Sequoia Capital China as a major investor.
In an initial filing, the company, which allows consumers to group together to increase the discounts offered by merchants, claimed 103 million active users of its mobile platform as of the end of March.
The Shanghai-based firm was valued at $ 15 billion in an April fundraising round and was looking to double that, Thomson Reuters publication IFR has reported.
Thanks to its low-priced products and larger user base in China’s smaller cities, the company’s gross merchandise volume exceeded 100 billion yuan last year, a milestone for Chinese e-commerce firms that took Alibaba’s Taobao marketplace five years and JD.com 10 years to reach. Pinduoduo’s revenues have grown sharply, reaching 1.38 billion yuan ($ 206.4 million) in the first quarter of 2018 from 37 million yuan a year ago. Net losses, however, remained broadly steady at 201 million yuan.
CICC, Credit Suisse, Goldman Sachs and China Renaissance are advising Pinduoduo, according to the filing.
Reporting by Julie Zhu in Hong Kong and Nikhil Subba in Bengaluru; Editing by Maju Samuel
Fresh off hitting an elusive production target for the Model 3 electric sedan – and a weekend offer to help rescue the young soccer players trapped in a Thai cave – Tesla CEO Elon Musk popped up in Shanghai to unveil plans for his long-held goal of a massive Chinese plant. What wasn’t mentioned was how Tesla will cover the facility’s multi-billion dollar price tag.
Dubbed Gigafactory 3 the project envisioned for the Shanghai Lingang industrial zone will be able to build 500,000 electric Teslas a year, as well as all the batteries and motors they’ll need, according to a city government statement provided by Tesla. The plant, which Shanghai said would be the largest foreign-backed industrial project in its history, could also cost as much as $ 5 billion, according to Robert W. Baird & Co. equity analyst Ben Kallo.
“That’s a good starting point,” Kallo said in a Bloomberg interview. “The biggest question right now for investors, bulls and bears alike, is how are they going to pay for it?”
Never one to think small, billionaire Musk is adding the project as Tesla continues to smooth out and accelerate Model 3 production after its tortured 12-month rollout. The company is already on the hook to continue funding its original Sparks, Nevada, battery Gigafactory, also a $ 5 billion undertaking, endless modifications to its main Fremont, California, plant, development costs for the Model Y crossover, a new Roadster sports car, its heavily promoted Tesla Semi and maybe a pickup truck. Oh, and if those capital costs weren’t enough, it’s also funding a self-driving technology initiative being done entirely in-house.
“As Laozi said in the Tao Te Ching, long journeys begin with small steps,” Barclays equity analyst Brian Johnson, wrote in a research note. “And to Tesla’s credit, today’s announcement is that small step – but we also note that there will a long journey ahead (with needs for funding, plant location and construction, battery partners and supply chains) before locally made vehicles reach Chinese streets.”
Financial details of the project weren’t mentioned at a press conference in Shanghai today, and a Tesla company spokesman declined to provide a cost estimate. The facility will be wholly owned and operated in Lingang by Tesla, and conduct R&D and local sales operations as well as manufacturing, according to a statement.
“It will be a state-of-the-art vehicle factory and a role model for sustainability,” Musk said in a statement. “We hope it will be completed very soon,” without elaborating.
Establishing a production foothold in China is essential for Tesla to grow in that market and avoid its painful tariffs on imported vehicles that would otherwise make Model 3 and other Tesla vehicles unaffordable for all but a few local buyers. Chinese government support for electric vehicles has made that market one that’s too big to ignore, particularly for a company that wants to dominate global EV sales.
“Tesla’s investment will further cement China’s position as the undisputed global center for EV production,” Michael Dunne, a longtime China watcher and CEO consultancy ZoZo Go, told Forbes. Potential financial support for the factory could come from Chinese internet search powerhouse Tencent, which bought a 5% stake in Tesla in 2017, or perhaps from the Shanghai government itself, Dunne suggested.
Given the complexity of setting up a major Chinese manufacturing hub, Gigafactory 3 may not ready to go until the early 2020s, Barclays’ Johnson said, which could be a problem.
“While Tesla no doubt can enjoy some brand cachet in China as a tech innovator, which at least ensures a niche position, in the meantime local OEMs, European and US automakers are readying themselves for a speedy uptake of BEVs in China,” he said. Volkswagen, General Motors and BYD have already laid out plans for large-scale battery electric vehicle sales in China, and new players including Byton, XPeng are also readying luxury models that would potentially compete for the premium buyers Tesla targets.
Undoubtedly, Tesla will have to raise further capital to pay for the plant, Kallo told Bloomberg. Like Dunne, he also thinks a potential partner will step in to help defray some of the investment expenses, much as Tesla battery partner Panasonic at the Nevada Gigafactory.
“I’m not saying Panasonic will be the partner but you’ll see someone step in there,” he said. “We’ll hear more about that in the months ahead.”
The target for a Chinese plant to have a half million units of production capacity matches Tesla’s goal for Fremont, which it hasn’t yet attained even with the burst of Model 3 production at the end of June. First-half production at the plant that also builds Model S sedans and Model X SUVs was 87,833 units. After numerous delays, Tesla said this month it was finally building that car, nominally priced from $ 35,000, at a rate of 5,000 units per week. Musk aspires to take that level higher, but the company hopes sustained production at that volume will allow it to generate sufficient cash to fund its growing list of initiatives and, for the first time, some form of profitability.
Musk has vowed that Tesla will be in the black in this year’s third and fourth quarters, a tall order since it’s only had two, non-consecutive profitable quarters since its 2010 IPO. If the company actually achieves that, raising money for the Chinese plant should be easier.
“The access to the equity markets is there if they have growth opportunities,” Kallo said. “The important thing is the second of the year to actually show a return on this invested cap they’ve been putting in for the Model 3. Then investors will get comfortable with that and will be willing to finance other growth opportunities.”
JAKARTA (Reuters) – Chinese video app Tik Tok, the most downloaded app globally on Apple Inc’s app store in January-March, will set up a team of censors in Indonesia to overturn a ban imposed for “inappropriate content”, local media reported on Thursday.
The app is popular among young people for its homemade music videos. But access was blocked on Tuesday by authorities in Indonesia, home to the world’s biggest Muslim population, for featuring content deemed pornographic and blasphemous.
Minister of Communication and Informatics Rudiantara told Reuters that the ban was temporary and could be lifted after Tik Tok cleaned up its content.
“We’ve asked Tik Tok to build a system that filters negative content and want them to have a liaison office in Indonesia,” the minister said on Thursday.
Tik Tok is operated by venture-capitalist backed Toutiao, one of China’s fastest-growing technology startups valued at over $ 30 billion, people familiar with the matter told Reuters.
A Toutiao spokesperson told media on Wednesday that Tik Tok would set up a team of 20 censors in Indonesia charged with monitoring and sanitizing content.
The firm’s vice president, Zhen Liu, was quoted by newspaper Tempo as saying Toutiao would add up to 200 employees to Tik Tok’s Indonesia office by the end of the year.
Rudiantara would not confirm to Reuters whether the changes would be sufficient to lift the ban.
Reuters could not reach Toutiao or Tik Tok for comment on Thursday.
Reporting by Cindy Silviana & Fanny PotkinEditing by Christopher Cushing
WASHINGTON (Reuters) – U.S. President Donald Trump on Tuesday floated a plan to fine ZTE Corp $ 1.3 billion and shake up its management, as U.S. lawmakers vowed to keep sanctions that crippled the Chinese telecommunications firm.
Trump, speaking to reporters at the White House about ongoing trade negotiations with China, said there was no deal with Beijing on ZTE. In addition to the fine, Trump said ZTE should come under new management and name a new board of directors.
Republicans and Democrats in Congress, however, accused the president of bending to pressure from Beijing to ease up on a company that has admitted to violating sanctions on Iran. Their reaction could complicate U.S. efforts to win trade concessions from China to narrow a $ 335 billion annual trade gap.
“The proposed solution is like a wet noodle,” said Senate Democratic Leader Chuck Schumer, who accused Trump of jeopardizing national security for what he described as minor trade concessions.
Schumer, speaking before Trump detailed his latest thinking on ZTE, added that the possible remedies floated earlier by the Trump administration were inadequate.
According to sources familiar with the discussions, a proposed trade deal with China would lift a seven-year ban that prevents U.S. chipmakers and other companies from selling components to ZTE, which makes smartphones and telecommunications networking gear.
In return, China would eliminate tariffs on U.S. agriculture or agree to buy more farm products from the United States.
The U.S. Commerce Department imposed the ban in April after it determined that ZTE had broken an agreement after it pleaded guilty to shipping U.S. goods and technology to Iran.
The ban has threatened the viability of China’s second-largest telecoms maker by cutting off access to companies that supply 25 percent to 30 percent of its components. Suppliers include some of the biggest U.S. tech companies, including Alphabet Inc’s Google, which licenses its Android operating system to ZTE, and chipmaker Qualcomm Inc.
ZTE last week said it had suspended its main operations.
The U.S. Department of Defense has also stopped selling ZTE’s mobile phones and modems in stores on its military bases, citing potential security risks.
U.S. Treasury Secretary Steven Mnuchin told lawmakers that the treatment of ZTE was not “a quid pro quo or anything else” related to trade, and said national security concerns would be taken into consideration.
“I can assure you that whatever changes or decisions that are made in Commerce will deal with the national security issues,” Mnuchin told a U.S. Senate appropriations subcommittee.
Republican and Democratic lawmakers said they were looking at ways to block any possible changes. “We will begin working on veto-proof congressional action,” Republican Senator Marco Rubio said on Twitter.
Lawmakers are considering several possible options and aim to act “soon,” said Dick Durbin, the Senate’s No. 2 Democrat.
The Senate Banking Committee voted 23-2 on Tuesday to adopt a measure that would make it harder for the president to modify penalties on Chinese telecommunications firms. It was added to legislation that would tighten oversight of foreign direct investment.
The Republican-controlled House of Representatives is weighing several possible changes to a defense-policy bill that would also keep up the pressure on ZTE. One proposal would block the sale of ZTE products and those of another Chinese company, Huawei Technologies, until national security officials certify they are safe.
Another proposal would require the director of national intelligence to consider the security implications of any changes to the ZTE ban, while a third would require reports on quid pro quo offers between the U.S. and Chinese governments over any possible plan.
(This version of the story corrects first paragraph to show lawmakers vowed to keep sanctions, not block them.)
Additional reporting by Susan Heavey, Doina Chiacu and David Lawder; Writing by Andy Sullivan; Editing by Chris Sanders and Paul Simao
HONG KONG (Reuters) – Two Chinese bitcoin mining equipment makers plan to raise up to $ 1 billion each from Hong Kong listings this year, riding on strong global interest in cryptocurrencies, IFR reported on Tuesday, citing people familiar with the plans.
Canaan Creative filed a listing application to the Stock Exchange of Hong Kong on Monday, IFR, a Thomson Reuters publication, reported.
Zhejiang Ebang Communication has also started working with advisers on a proposed Hong Kong float of up to $ 1 billon, reported IFR.
Ebang listed on China’s National Equities Exchange and Quotations, also known as the New Third Board, in 2015 and was
delisted from the over-the-counter market in March after announcing in January that it would seek a Hong Kong listing.
Chinese bitcoin mining equipment makers are hungry for capital to fund their growth as the heightened interest in cryptocurrencies has led to a surge in demand for their machines.
Canaan, which sells “Avalon” mining machines with customised super-fast ASIC chips, made revenue of more than 1 billion yuan in 2017. Although cryptocurrencies can be mined using regular computer equipment, specialised processing devices dedicated to mining are more effective and can generate more income.
The company’s co-chairman Jianping Kong told Reuters in April that he expected China’s push to promote the domestic chip industry to help drive growth for the company.
Credit Suisse, CMB International, Deutsche Bank and Morgan Stanley are joint sponsors for Canaan’s float, according to IFR.
Canaan Creative declined to comment. Ebang could not be immediately reached for comment. All the banks didn’t immediately respond to a request for comment.
Canaan’s IPO valuation has yet to be set as there is no listed comparable and the prices of cryptocurrencies have
fluctuated a lot, reported IFR. It was valued at $ 500 million in mid-2017, IFR said, attributing it to one of the people.
Reporting by Fiona Lau at IFR; Additional reporting by Sijia Jiang; Writing by Julie Zhu; Editing by Muralikumar Anantharaman
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