China Tech News

With heat bearing down on their necks in China from local competitors Huawei and ZTE, Cisco has decided to invest more into their China operations.

The U.S.-based company plans to invest over USD10 billion in China over the next few years to support local innovation with a series of strategic measures.

Cisco made this promise during the China visit of its chairman and current CEO John Chambers and its soon-to-be CEO Chuck Robbins.

The company signed a memorandum of cooperation with China's National Development and Reform Commission. According to the memorandum of cooperation, Cisco will further increase its investments in China and will cooperate with local firms and governments in various sectors, including innovation, investment, research and development, and employment.

In addition, Cisco signed an information technology talent training memorandum of cooperation with the Association of Universities (Colleges) of Applied Science. Based on the existing network technology academy program, Cisco will implement a 4-year cooperation with up to 100 universities and colleges of applied science recommended by AUAS.

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Chinese Internet security company Qihoo 360 has signed a strategic cooperation framework with Guohua, a subsidiary of Sinopharm Group, to establish a medical e-commerce joint venture.

With the cooperation, the two parties will create an online pharmaceutical sales platform to solve the difficulties and high-price issue in the medical care sector for medical distribution. Many forms of pharmaceutical products are illegal to be sold online in China, so the companies have not specified how ow what they are doing to avoid these regulatory issues.
Meanwhile, the two parties said they will implement more cooperation in the online medical sector in the future.

Sinopharm Group operates over 30,000 kinds of drugs and health products, including prescription and non-prescription drugs, personal care products, and medical supplies. As a national pharmaceutical group, Sinopharm will provide unprecedented price and resource supports to the emerging e-commerce platform.

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Alibaba is working directly with foreign embassies in China to expand its influence and sales potential around the world.
The e-commerce company has opened 11 official country pavilions on its Tmall Global platform and cooperative partnerships between Juhuasuan, Alibaba's group-buying platform, and 26 foreign embassies in China.

A total of 11 countries, including United States, New Zealand, Australia, Switzerland, France, Britain, Spain, Singapore, Thailand, Malaysia and Turkey will launch country pavilions on Tmall Global, an extension of Tmall.com China's largest third-party B2C platform for brands and retailers. These country pavilions are curated online verticals aimed at providing Chinese consumers with a one-stop shop for popular products from a particular country and other travel and cultural information. Brands already on Tmall.com and Tmall Global can opt to join their originating country's pavilion.

In May, Korea was the first country to launch a country pavilion on Tmall.com, allowing small-medium Korean enterprises to sell authentic products such as cosmetics and apparel directly to Chinese consumers.

By cooperating with various governments and official trade agencies and utilizing Cainiao's, Alibaba Group's logistics affiliate's, extensive logistics network, Alibaba's e-commerce platforms are able to help small businesses anywhere sell high-quality products directly into China. As a pioneer of large-scale cross-border e-commerce, Alibaba not only lowers trade barriers for those looking to sell into China, but also meets the needs of China's rising middle class consumers who are increasingly looking for high quality, imported products.

According to a recently released report on cross-border e-commerce by Accenture, by 2020, China is expected to become the world's biggest cross-border B2C market.

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Alibaba Group announced that the company and Taiwan-based Foxconn have made strategic investments of JPY14.5 billion, which is about CNY732 million, into SoftBank Robotics Holdings Corporation.
Under the agreement signed by the three parties, Alibaba and Foxconn will hold a 20% stake in SBRH, respectively; while SoftBank will own the remaining 60%.

Alibaba, Foxconn and SoftBank will work together to promote the global development and expansion of robot industry. So far, SBRH has developed a robot product with emotions named Pepper.

At the beginning of 2012, SoftBank acquired a French robot company Aldebaran and founded SBRH based on the acquisition. In 2014, the Japanese group continued its acquisition and investment in robot-related products, covering expression cloud services and expression sensing technology.

Jack Ma, chairman of Alibaba Group, said that in the future, the robot industry is expected to become the key sector to promote technical breakthroughs in medical, public service, research, and smart home.

Zhang Jianfeng, Alibaba Group's president for its Chinese retail business group, said that by investing in SBRH, the company hopes to establish its robot industrial channel and further explore the smart device sector.

Alibaba's interest in the robotics appears focused on enhancing its smart platform and establish research cooperation and communications mechanism with SBRH in various sectors, including machine vision, voice analysis, family smart control systems, and smart network security. Alibaba is betting its smart home products will benefit from more robotics input.

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Alibaba has agreed to sell four of its American e-commerce assets to U.S.-based social shopping platform OpenSky.
Alibaba will give OpenSky 11main.com, Auctiva, Vendio and SingleFeed in exchange for about a 37% stake in OpenSky.
No financial details or exact timing on the deal are yet available, according to reports in foreign media.

11main.com is an online shopping platform launched by Alibaba at the beginning of 2014; while Auctiva, Vendio, and SingleFeed were acquired by the Chinese e-commerce group in 2010 and 2011 to provide logistics and performance services to 11main.com.

Compared with Alibaba's Chinese online shopping websites, 11main.com is a very small business and it is reportedly difficult for this American subsidiary to gain attention or support from Alibaba's Chinese headquarters in Hangzhou. This lack of attention may suggest Alibaba does not have the international management expertise or expansion ability to get past the Great Wall and grow around the world.

Founded in 2009, OpenSky originally provided online trade platform services to well-known bloggers and it gradually transformed into a social shopping platform. At present, the company claims to have 50,000 vendors, two million kinds of products, and five million members.

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China Mobile, China Unicom, and China Telecom all published their operating statistics for May 2015 and China Mobile, who has over 800 million mobile users, continues to lead the Chinese telecom market.

Statistics showed that China Mobile gained 373,000 new users in May 2015 and its user group reached 816.335 million. Of those, the number of 4G users saw a net increase of 17.188 million and the total number of 4G users reached over 170 million. At the same time, its 3G users continued to decrease and saw a net decrease of 6.566 million in May.

China Telecom reported that its mobile users saw a net increase of 910,000 in May to a total of 190.68 million. Of those, 3G and 4G users increased by 2.01 million to a total of 129.18 million. Meanwhile, China Telecom's fixed-line phone users decreased by 620,000 to 139.94 million; while its broadband users increased by 400,000 to 109.18 million.

For China Unicom, its total user number was 290.306 million by May 2015, representing a decrease of 1.913 million compared with the previous month. Prior to this, China Unicom lost 2.532 million users in March and lost 1.609 million in April. In addition, the company said its 3G and 4G user group reached 152.787 million, accounting for 73% of its total users.

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A new law voted unanimously yesterday by the standing committee of the National People's Congress will enhance the Chinese government's control over the Internet.

Neither the actual text nor the commencement date of the full law has yet been released.

But Chinese domestic media report that the law gives the government far-reaching and vague powers to control and secure important Internet infrastructure and enforce cybersecurity.

In fact, the Chinese government already has defacto control over everything online. Sixteen years ago, as the Internet rose in prominence in China, Web portals like Sohu.com and Netease.com had their offices routinely visited by government officials intent on censoring the Internet. And today, the oversight has grown with the rise of social media and Weibo.com and WeChat being routinely censored and controlled.

All Web servers in China must also be licensed and housed at approved Internet Service Provider locations, which provides Chinese government agencies with management abilities of all netizen activity. And foreign companies are still not allowed to participate fully or easily in many technology-related sectors such as cloud computing hosting, Internet advertising sales, and Internet gaming.

At the same time, the Cyberspace Administration of China announced this week that it has barred Chinese websites from reporting details of bullying cases involving minors. Web companies will be asked to remove offending material, and then will be fined if they fail to act.

The anti-bullying announcement is meant to support and protect both bullies and victims from social pressures that could inflict more harm.

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Chinese smartphone company Xiaomi signed a licensing deal this week with U.S.-based WhiteCryption to protect Xiaomi's mobile application and data services.

This agreement extends Xiaomi's relationship with Intertrust Technologies Corporation, which owns WhiteCryption. Financial terms of the deal were not announced.
WhiteCryption's technology offers integrated software code protection, integrity check and white-box cryptography solutions that turn modern software applications on various platforms into self-diagnostic and self-protecting software products.

WhiteCryption's press statement though fails to address how or whether WhiteCryption will be used in China-based services. Chinese encryption law stipulates that code be made available to authorities for perusal. So the Xiaomi deal most likely affects ex-China services, and not those within the control of mainland Chinese authorities.

And if this does only assist Xiaomi with its services outside of China, what protections will Chinese users have for their app services?


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Semiconductor Manufacturing International Corporation's new research business has attracted three new investors.

Huawei, a Chinese telecom device maker; IMEC, a nanoelectronics research and development center; and Qualcomm Global Trading Pte. Ltd., a subsidiary of Qualcomm Incorporated jointly announced that they will establish and invest in SMIC Advanced Technology Research & Development (Shanghai) Corporation.

This joint venture will reportedly focus on the next-generation CMOS logic technology and build China's most advanced integrated circuit R&D platform.

SMIC Advanced Technology R&D (Shanghai) Corporation will be majority owned by SMIC, while Huawei, IMEC, and Qualcomm will be minority shareholders. Tzu-Yin Chiu, SMIC's chief executive officer and executive director, will be the legal representative of the new JV; and Yu Shaofeng, SMIC's vice president, will be the general manager. The JV's current focus will be on developing 14nm logic technology.

Specific share allocation breakdown and registered capital for the new business in Shanghai were not immediately available.
SMIC will have the rights to license the required intellectual property rights on the mass production technologies of advanced nodes developed by the joint venture, enabling these technologies to be applied to SMIC's current and future range of products and serve SMIC's business with other companies. This is expected to improve the overall level of China's IC technologies.

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Alcatel-Lucent has signed comprehensive framework agreements with China Mobile and China Unicom.

According to the agreements, Alcatel-Lucent will support the transformation of the two carriers and help them build faster and more cost-effective nationwide mobile and fixed broadband networks.

The annual agreement signed between Alcatel-Lucent and China Mobile is valued at CNY4.53 billion, which is about EUR656 million; and the one signed with China Unicom is valued at CNY3.59 billion, which is about EUR520 million. Basing on the agreements, Alcatel-Lucent will provide them with mobile and fixed super broadband access, IP router, and Agile Optical Networking solutions. The company will also offer NFV and SDN technologies.

With the deployment of those technologies and solutions, China Mobile and China Unicom can better promote the "Broadband China" strategy. According to planning, the "Broadband China" strategy will realize full broadband coverage in Chinese towns and villages.

By signing the framework agreements with China's two major telecom carriers, Alcatel-Lucent has become an important technical supplier during the implementation of "Broadband China" strategy.

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