China Tech News

During the late Steve Jobs' entire tenure as chief of Apple, he never visited China. But now the company is hoping it's not too late to the invest resources into country Jobs ignored.
Chinese ride-hailing app Didi announced an important part of its latest round financing and said that Apple will invest USD1 billion in the company. This is reportedly the largest single investment received by Didi. With this investment, Apple will become a strategic investor of Didi.

Cheng Wei, founder and chief executive officer of Didi, said that Apple's recognition of the company is encouraging for Didi. The company will continue to make efforts to provide flexible and reliable traveling options to people and help solve traffic, environment, and employment challenges.

Tim Cook, chief executive officer of Apple, said that Didi represents the innovative spirit of Chinese iOS developers. He said Didi's platform and management team are amazing and they are looking forward to supporting the long-term development of Didi.

But while it may look from the outside that this is a China-centric deal with Apple trying to appease both the Chinese government and its investors that it is taking China seriously (Apple saw stagnant China mobile growth in its last financial report), this is really a deal aimed at cars.

Specifically, self-driving cars are on Apple's mind. And the company is looking to the future where Uber and Lyft, which has a close investment and business alliance with China's Didi, are the global kings of providing driverless car services.


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One of China's oldest Web portals has a new home in the Chinese capital city.



Sina's new headquarters building has completed construction. Located in Zhongguancun Software Park, the new Sina building covers an area of 2.9 hectares, with a total construction area of about 132,200 square meters and an investment of about CNY1.5 billion. The building, which has six floors above ground and three floors underground, provides working areas, employee lounges, a gym, restaurants, and parking spaces.

The design of the building represents the low-carbon and energy-saving ideas the company hoes to espouse. It has a customized PM2.5 filtering system in addition to functions like air filter, UV disinfection, and automatic air volume control to help employees stay healthy while surrounded by Beijing sometimes-poisonous pollution.

In addition, the new Sina building has a rainwater recovery system and a solar heated water system, which significantly improves resource usage. The combination of glass curtained wall and blinds can meet the environmental protection and energy saving demands of the company.


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With all the buzz and attention Xiaomi receives, one may expect it to be a dominant force in China's smartphone world. But latest numbers show Xiaomi isn't even in the top two of the number of devices recently shipped.

During the first quarter of 2016, China's smartphone shipment reached about 104.9 million units, representing a decrease of 5% compared with the 109.8 million units in the same period of last year.

Statistics from market research firm Strategy Analytics show that Huawei smartphones were still leading the Chinese market. From January to March 2016, Huawei shipped 16.6 million smartphones, a year-on-year increase of 48%. Due to the wide distribution channels and its popular Android products such as Mate 8, Huawei achieved rapid development in China. However, there were signs that the company's development in high-end market was slowing down and its major competitors like OPPO and Vivo became more powerful.


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China's Alibaba and Japan's SoftBank jointly announced ta deal to expand services in the Japanese cloud computing market and bring Chinese cloud computing and big data technologies to Japanese enterprises.

According to the agreement, Alibaba and SoftBank will establish a cloud computing joint venture and set up a data center in Japan to provide Alibaba's Aliyun cloud computing and big data products and solutions to Japanese enterprises. SoftBank will focus at the marketing and sales level, while Alibaba will focus on the technology and product level.
Financial terms of the deal were not released.

Eric Gan, chief executive officer of the new joint venture, said that they are glad to cooperate with Aliyun. During the cooperation discussion, they have formed common goals and a good team spirit. In the future, they will provide leading cloud computing products and solutions to Japanese enterprises.


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How frustrating is it to conduct a search on China's leading search engine and not easily find the correct answer? This happens often partly because Baidu censors itself; partly because it takes cash for making ads look like search results; and partly because it has little need to innovate as it sits high on its government-controlled perch looking over the China Internet landscape.

But a new venture is seeking to upend this frustration, at least for academics and scholars in China whose access to quality information is necessary to fuel the innovation China so desperately needs.

Sogou.com, the search engine subsidiary of Sohu.com, and Microsoft have reached a deal under which Sogou will gain access to Microsoft's Bing global search technologies and launch two vertical channels: an English-language search and an scholarly search.
Sogou's English search channel will reportedly cover trillions of English information from all over the world which will provide the most accurate English web page information and English academic data to users when receiving English search requests. At the same time, the English search channel will offer an automatic translation function, allowing users to gain English search results by entering Chinese words directly.

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British telecom operator BT just submitted an application to China's Ministry of Industry and Information Technology to gain a license to operate a value-added telecom business in China's Shanghai Pilot Free Trade Zone.

The license is related to BT's VPN value-added service, which it sells to companies in China who rely on virtual private networks. There are many companies who already provide VPN services in China, including China Unicom, China Telecom, 21Vianet, Diyixian, and Neusoft, but many foreign companies choose foreign providers like BT or AT&T for these types of services in China.

The company said no further detail is available on the scope of their VPN service as they has not yet received their license.
Both foreign and Chinese media often erroneously report that VPN services are illegal in China, but these types of privacy services actually have always been legal in China. Danny Levinson, founder of China-based VPN provider Kovurt.com, says journalists don't understand how business is done in China or what is legal or how companies register their scopes of businesses, so often misinformation is spread.

Levinson says, "When you sign an office lease in China, often the first guys knocking on your door are the telecom company who offer a menu of services including VPN services. VPN services are legal in China, but companies who are unregistered in China are not legally allowed to sell their unregistered services. So foreign companies like AT&T, Cisco, and BT need to get the correct licenses before they can sell. VPN services are illegal if sold by an unlicensed provider, but legal if sold by a company whose scope of business includes that type of service."

During the World Economic Forum held in Dalian in September 2015, BT China president He Weiqin said that BT was actively applying for its value-added business license in China. On May 18, 2016, BT Group chairman Michael Rake revealed that he recently visited MIIT and was seeking opportunities to bring BT's products and technologies to the Shanghai Pilot Free Trade Zone. With the boom in fintech, online payments, and e-commerce in China, VPN services complement the privacy and security needs of companies in China.

BT is reportedly the largest broadband operator in U.K. In the financial year ended March 31, 2016, BT Group realized revenue of about GBP18.9 billion, which was about CNY180.4 billion; and its profit before tax was about GBP3 billion, which was about CNY28.9 billion. On January 29, 2016, BT completed its acquisition of EE, the largest mobile operator in U.K., for about GBP12.5 billion.


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Facebook began as a campus-wide social network for students, and a newly-invested business in China is claiming a similar origin story.

Campus social software and app company tataUFO announced that they have completed Pre-B financing, which was led by SoftBank Global Star Fund and participated by Lightspeed Venture Partners and SkyChee Ventures.
Lightspeed Venture Partners and SkyChee Ventures also invested in tataUFO's round A financing.
TataUFO is the venture project of Brian Hyeon-woo Cheong, a South Korean student who studied at Guanghua School of Management at Peking University in Beijing. During his study, Cheong established this platform to meet the demands of cross-school communications.

This campus social software features real-name social registrations and its core function is friend matchmaking and recommendations. At present, tataUFO claims to have over three million registered users, covering over 1,000 universities in China and abroad. In the same period of 2015, the platform only had 1.2 million users.

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Dong Mingzhu, chairman of Gree Group, revealed that the company has acquired a new-energy company and plans to start making electric cars.

Gree is not the first Chinese company to tap this sector. Information technology companies like Letv and Baidu already entered the new-energy car sector, and they have capital advantages. Plus, foreign interlopers like Tesla have bankrolled retail operations in China to promote their automobiles.

In March 2016, A-share market listed company Gree stated that the company planned to issue new shares for asset purchases. The acquisition target was Zhuhai Yinlong New Energy Company Limited, whose main business is new-energy vehicles. Yinlong produces 33,000 electric buses and 100,000 electric SUV vehicles annually. With this transaction, Gree will realize its inter-trade development and enter the new-energy vehicle sector.

Commenting on the inter-trade development of Gree, Dong said the times are changing, and so are the business ideas of Gree. The company aims at multi-brand operations and introducing more Chinese brands to the world.

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Chinese smartphone company Xiaomi and Microsoft will reportedly further expand their global cooperation partnership to provide innovative user experience on mobile devices.

As a part of their agreement, Xiaomi will pre-install Microsoft's applications, including Office and Skype, on its Android smartphones and tablets, allowing its users to enjoy new work collaboration and communication methods. Meanwhile, the new cooperation of the two parties will cover patent cross-licensing and transfer agreements. Financial terms of the deal were not released.

Wang Xiang, senior vice president of Xiaomi, said that they are glad to implement extensive technical cooperation with Microsoft. Xiaomi always aims to provide the best user experience to fans and they hope to establish a sustainable and long-term partnership with global technology leaders.

Peggy Johnson, Microsoft's executive vice president for business expansion, said that by combining Microsoft's applications and services with Xiaomi's devices, millions of users in China and the world will be able to improve their office efficiency on mobile devices.


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Chinese e-commerce provider JD.com jointly announced with Internet search engine Baidu.com and diversified online service company Tencent an investment in Bitauto, a Chinese automotive industry Internet company.

Each of the three companies aim to raise USD50 million to take their respective stakes in Bitauto. Baidu, Tencent and JD.com each agrees to purchase 2,471,577 newly issued ordinary shares of Bitauto at USD20.23 per share, corresponding to USD20.23 per American depositary share, each representing one ordinary share of Bitauto. The purchase price represents the average volume weighted closing trading price of Bitauto's ADSs for the five trading days prior to the signing of the definitive agreements.

Bitauto also announced that pursuant to definitive agreements entered into by and between Bitauto and PA Grand Opportunity Limited, Bitauto agrees to issue convertible bonds to PAG or its affiliates in an aggregate principal amount of up to USD150 million. William Li, chief executive officer and chairman of Bitauto will indirectly purchase a portion of the CBs through PAG under a total return swap arrangement with PAG.

Upon the closing of both transactions, Baidu, Tencent, JD.com and holders of the CBs will hold 3.2%, 7.1%, 23.5% and 8.2%, respectively, of Bitauto's outstanding shares on a fully diluted basis taking into effect the new issuance and the conversion of the CBs at the initial conversion price.

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