China tech: 5 big issues from regulation and EVs to semiconductors

GUANGZHOU, China — China's expertise sector has taken a wild trip over the previous 12 months, with rules tightened, billions of {dollars} wiped off firms' market worth, and a unbroken push from Beijing for technological self-sufficiency.

Those are among the many necessary themes that can be addressed at CNBC's annual East Tech West occasion within the Nansha district of Guangzhou in southern China.

Here's a take a look at the highest issues and focuses of China's expertise sector proper now.

China's tech crackdown

In November 2020, what would have been a world record-setting preliminary public providing of fintech large Ant Group was suspended.

Following that, Beijing launched a slew of latest guidelines in areas from antitrust for web platforms and a bolstered information safety regulation. Both e-commerce large Alibaba and meals supply agency Meituan have confronted antitrust fines.

That has weighed closely on China's web names. For instance, Alibaba's shares are down 41% year-to-date.

Several questions are swirling:

  • Will China introduce extra new regulation and in what areas?
  • What firms could possibly be focused subsequent?
  • What does it imply for development of the tech sector in China?

CNBC tackled a few of this in a current episode of the "Beyond the Valley" podcast beneath. Those conversations will proceed at East Tech West.

Semiconductors

The persevering with expertise rivalry between the U.S. and China has added urgency to Beijing's push for elevated self-sufficiency throughout quite a lot of sectors. One of these is semiconductors, that are vital for all the things from automobiles to cell phones.

But China is struggling to meet up with the U.S. and different nations, and that's due to the complexity of the semiconductor provide chain, which is dominated by overseas firms.

instance is the sphere of chip manufacturing. SMIC, which is China's largest contract chip producer, is a number of years behind Taiwan's TSMC and South Korea's Samsung. SMIC is definitely unable to manufacture the most recent cutting-edge chips required for main smartphones.

Foreign firms dominate probably the most superior instruments and tools required for the manufacture of high-end chips. U.S. sanctions have denied China entry to a few of these instruments. Chinese firms can't compete.

How China will increase its home chip trade within the face of these hurdles is a significant, ongoing debate.

Read extra on semiconductors

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'Frontier' tech

The semiconductor trade is only one of many industries the place China is making an attempt to increase its credentials.

In its five-year growth plan, the 14th of its type, launched earlier this 12 months, Beijing stated it might make (*5*)

The plan identifies areas which Beijing sees as "frontier technology" — synthetic intelligence (AI) and house journey.

China has made notable progress in house, together with launching its personal house station. It has ambitions to ship its first crewed mission to Mars in 2033.

When it comes to synthetic intelligence, Chinese expertise giants from Baidu to Tencent are investing closely.

Electric automobiles

Another space that China is emphasizing — and one which traders know effectively — is electrical automobiles. The trade is a part of its drive to cut back emissions and pledge to change into carbon impartial by 2060.

For a number of years, the Chinese authorities has supported the event of so-called new power automobiles by subsidies and different favorable insurance policies. That has led to tens of 1000’s of firms coming into the trade, although many have by no means produced a single automotive.

About 1.1 million electrical automobiles had been bought within the first half of this 12 months, almost as many as had been bought in all of 2020, in accordance to market analysis agency Canalys. China is the world's largest electrical car market.

That development has attracted a number of new gamers with a expertise background. Xiaomi, which is thought for smartphones, expects to mass produce its personal electrical automobiles within the first half of 2024, whereas search large Baidu has arrange its personal electrical automotive enterprise with Chinese automaker Geely.

Read extra on electrical automobiles

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China's financial slowdown

China's expertise giants now are having to address a slowing Chinese economic system.

Plenty of components together with energy shortages and efforts to rein in debt-fueled enlargement in the actual property sector have added to different financial challenges, corresponding to sluggish client spending.

It's beginning to filter by into company monetary outcomes. Alibaba slashed its income steering for the present fiscal 12 months.

Tencent Chief Strategy Officer James Mitchell stated on the corporate's earnings name that he expects promoting to "remain soft for several quarters due to macro challenges and regulations affecting certain key advertising sectors."

based mostly on web site supplies www.cnbc.com

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