Category Archives: China

Huawei and the ‘Five Eyes’ nations: How an intelligent plan was cooked up to kill China telco

Always more to a story than our social media feeds pick up.

I have always wondered when the modern world might wake up to the issue that a lot of military tech and wireless infrastructure Is built with Chinese components.

Seems this is what it is about.

Huawei and the ‘Five Eyes’ nations: How an intelligent plan was cooked up to kill China telco

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Huawei CFO arrested, expect trade talks to continue as US-China tech strains intensify

Great quick take on the Huawei stuff and its broader implications.

Huawei CFO arrested, expect trade talks to continue as US-China tech strains intensify:

I have seen speculation that China may retaliate by arresting a US tech executive. That would certainly be explosive, but I am not sure Beijing would do that without a very clear legal case as it would undermine the massive propaganda campaign the Party has undertaken to portray the PRC as open for foreign business and as the defender of the global trading system. However, if I were a US tech executive I would delay travel to China for a bit or go on a vacation if based there…

Remarks by Henry M. Paulson, Jr., on the United States and China at a Crossroads – Paulson Institute

The whole speech is good. 

I don’t agree with it all but these are troubling times.

I have highlighted the part that really hits home with me.

Remarks by Henry M. Paulson, Jr., on the United States and China at a Crossroads – Paulson Institute:

Meanwhile, the integration of people, especially the brightest young students, could also stall — as Washington potentially bans Chinese students from studying whole categories of science and engineering subjects.

If all this persists—across all four baskets of goods, capital, technology, and people—I fear that big parts of the global economy will ultimately be closed off to the free flow of investment and trade.

And that is why I now see the prospect of an Economic Iron Curtain—one that throws up new walls on each side and unmakes the global economy, as we have known it.

Now, as a practical matter, rather than an aspirational one, China still relies a lot on global capital, trade, investment, and foreign know-how.

And so the most strident calls for “decoupling” are actually coming from the United States and, to a lesser extent, from Europe, not from China.

But here’s the problem for those in my country who advocate a US-China “divorce”:

“Decoupling” is easier when you’re actually a couple.

But the United States and China are not, in fact, a couple. There are more than two players here. And the rest of Asia, in particular, gets a vote.

So the US can try to divorce China by restricting flows of goods, capital, technology, and people. But what if others, especially in Asia don’t want to follow suit?

Many years of working in and around Asia have taught me this:

I do not believe that any country in Asia can afford to divorce China, or even wishes to.

That is a function of their geography, of economic gravity, and of the strategic reality they live with each and every day.

It is true that many governments and businesses around the world share Washington’s current concerns. And sometimes, these governments and businesses are pursuing similar policy and business choices, particularly with regard to investment screening for national security risk, which is being bolstered in a number of countries, especially in Western Europe.

But let us not presume this also means that everyone, including America’s closest allies, is ready to “divorce” China, as some in Washington would now have it.

On the contrary, no country, in my view, will “divorce” a major nation that remains, even amid a slowdown, among the world’s fastest growing major economies.

So in its effort to isolate China, the United States risks isolating itself.

Consider what would happen, for instance, if multinational companies decided that they should be headquartered somewhere else — still aiming to ride the wave of a growing Chinese economy but in a country less hostile to their doing business with Beijing.

Hosting scores of leading, best-in-class multinational corporations is among America’s greatest competitive strengths. And it is one that America now risks surrendering — if it cannot get right its links with the world’s fastest-growing economies, including China’s.

Frankly, de-integration is inevitable, and even necessary, in some areas—not least to protect our national security.

But it is decidedly not in America’s interest to attempt this across the board.

Divorce doesn’t work well for global businesses.

And the same could be said for the trade policies that drive companies and countries away.

This is exactly what worries me about the new clause Washington inserted into the recent US-Mexico-Canada trade agreement, which aims to short-circuit or even veto efforts by America’s partners to open China’s market through their own trade negotiations.

Why would Asian countries, which are negotiating the Regional Comprehensive Economic Partnership, among a group of 16 that includes China, walk away from their negotiation at the behest of the country that pulled out of the Trans-Pacific Partnership?

I presume they will not.

So instead of pursuing a carefully calibrated de-integration—focused on sensitive and critical areas—the US seems instead to be flirting with a comprehensive de-integration.

And through initiatives like that new trade clause, Washington now strikes many people as attempting to disrupt all aspects of China’s external economic relationships.

This risks setting Washington up for a new round of battles with its allies and partners—the very partners it needs to help alter Chinese behavior.

And this, Ladies and Gentlemen, is what I mean by American “self-isolation.”

Segway history: The rise and fall — and rise again — of the scooter company – CNN

Fun read.

I am sure Dean never thought he would see Segway mostly being a manufacturing shop for scooters.

Funny how Segway was introduced to Ninebot:

In 2014, Segway convinced the US International Trade Commission to investigate infringements of Segway’s patents for its self-balancing technology. One of the companies listed in Segway’s complaint was Ninebot, which quickly offered to buy the company.

Segway history: The rise and fall — and rise again — of the scooter company – CNN:

Brown bought the company from the estate of Jimi Heselden, a British entrepreneur who died after riding his Segway off a cliff. Segway was barely getting by on the meager revenue it brought in selling the PT to tour companies, security companies and police departments. But Brown saw a global brand with a powerful distribution channel. Six million tourists rode Segways on tours of cities like San Francisco and Washington, DC each year. He planned to buy other transportation companies focused on short trips, like e-bike startups. All he had to do to make Segway profitable, he figured, was run the place well.

Brown brought on new employees to change Segway’s uptight culture. He led an effort to trim costs by reengineering a circuit board, ditching the PT’s expensive gyroscope in favor of a cheaper solution, and negotiating a better battery contract. It worked. Segway turned a profit within a year of Brown’s arrival. He sold the company to the Chinese firm Ninebot on April 1, 2015 for more than $75 million.

How WeChat faded into the silence in India | FactorDaily

Long in depth read on not just WeChat but a few of the Chinese companies trying to win in India.

The whole thing is good but the summation is spot on.

How WeChat faded into the silence in India | FactorDaily:

Sahai says that for Chinese companies mainly those supported by the BAT (Baidu, Alibaba, Tencent) trio, China market is always the core business and the rest of the market is an expansion, which creates some sort of inertia when dealing with the competition here in India.

But, it has become increasingly clear that India as a market cannot be generalised. As Sajith Pai, who works with VC firm Blume Ventures, puts it, India is divided into three consumer segments: the first 100 million, mainly the urban or affluent Indians and are the main targets of indulgent e-commerce brands; the second 100 million classified as the aspiring class; and the last a little over a billion — three segments he calls the splurgers, strivers and survivors.

Pai says that most global companies investing in India, including Apple, Facebook and Instagram are aware of this graph and think of India as a secondary market by targeting the first 100 million. Things may be changing from the WeChat days with a new crop of Chinese companies trying to cater to the new 100 million, including rural India, new internet users and youngsters. Case in point: MX player, NewsDog, Shareit, and UCBrowser that cater to the new internet users in India have a higher chance of surviving in India because they understand the new Indian users better.

Still, unlike China where there is a big government-initiated push for a common language and similar culture, cultural diversity in India, like lack of a common language, city structures, and economic disparity makes it difficult to generalize the Indian market. That’s the lesson that Tencent – and, indeed, the BAT trio – seems to have learnt and are only investing in large Indian companies.

KKR’s Kravis Sees Southeast Asia Winners in U.S.-China Trade War – Bloomberg

I guess a contrarian view of sorts where the USA/China trade war benefits SEA region. Possible but I assume there will be pain before the possible gains.

KKR & Co. is seeking to invest more in Southeast Asia, where companies are poised to benefit from the U.S.-China trade dispute, according to the private equity firm’s co-founder Henry Kravis.

— Read on www.bloomberg.com/news/articles/2018-10-02/kkr-s-kravis-sees-southeast-asia-winners-in-u-s-china-trade-war

China’s secret startup advantage: liquidity | TechCrunch

China’s secret startup advantage: liquidity | TechCrunch:

Faster liquidity can push cycle of returns, fundraising, reinvestment

This is the struggle with the SEA ecosystem. Just not enough liquidity yet to create the magical cycle.

USA and China have it. India with some of their monster exits creating some secondary action to enrich employees is crawling towards it.

As some of the big unicorns in SEA start to make some employees rich – there will be some mini cycles around that.

One should not knock what SEA and Razor of done to help get this going as well.