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But unlike ICBC and its peers, Ant neither took deposits, nor piled risky loans onto its balance sheet. Free from the red tape that binds regular banks, the loans facilitated by Ant ballooned. Digital offerings accounted for half of overall consumer loans in China, Fitch Ratings calculated in 2021. Ant is set to become a licensed financial holding company, putting it under the close watch of China's main banking regulator. Beijing wants Chinese consumers to consume, so is likely to indulge controlled growth of consumer credit.

☆ Huawei turns to patents for a lifeline — including those in the U.S.
▼ + stars: | 2023-02-06 | by ( Evelyn Cheng | ) www.cnbc.com time to read: +7 min

In 2022, Huawei announced it signed more than 20 new or extended licensing agreements for its patents. But the sheer number of patents filed meant Huawei ranked fourth last year by the number of patent grants in the U.S., IFI said. For Huawei, licensing its patents to other companies has the potential to claw back a bit of that revenue. Huawei did not break down specific figures, and only said it met its intellectual property revenue expectations for 2021. "I don't think they had a choice in terms of sort of boosting their licensing revenue."

HONG KONG, Jan 9 (Reuters Breakingviews) - Jack Ma is leading China’s consumer internet out of the sin bin. After his fintech champion Ant said its founder will cede control, shares in affiliate Alibaba (9988.HK), rose 7% in Hong Kong on Monday morning. The company on Saturday announced that Ma's 50%-plus voting stake will be whittled down to roughly 6%, and a fifth independent director will join the board. Follow @mak_robyn on TwitterloadingCONTEXT NEWSChinese financial technology company Ant on Jan. 7 announced its founder Jack Ma will give up majority control of the company as part of a broader "corporate governance optimization". Ma held more than 50% of voting rights in Ant via his investment vehicle, Hangzhou Yunbo, which effectively controlled two other entities that owned a combined 53.46% stake in Ant.

HONG KONG, Jan 5 (Reuters Breakingviews) - Western Digital (WDC.O) faces a daunting M&A challenge. Both outfits specialise in a type of memory chip called NAND flash, which is used in smartphones, computers and data centre servers. Yet even if the logic for a combination looks more compelling against this backdrop, the M&A hurdles Western Digital faced in 2021 are even more challenging today. The union between Western Digital and Kioxia will be a long slog, but worth it. Shares of Western Digital rose 7.7% to $35.63 during after-hours trading in New York on Jan. 4.

Foxconn, formally known as Hon Hai Precision Industry, is gearing up to supply cars, and the chips and batteries that go into them, to global marques. It sees automakers entrusting the company with production in Indonesia, Thailand, Saudi Arabia, the United States and beyond. Getting there requires Foxconn ditching a tried and tested business model. To make smartphones, the company relies on a few factories it owns in China and it has little say over the underlying supply chains and which components to use. Foxconn has also tied up with Ohio-based Lordstown Motors (RIDE.O) in the United States; its factory is already making electric pickup trucks and could start supplying to other American brands within a year.

HONG KONG, Dec 19 (Reuters Breakingviews) - America’s chip war against China will make only partial inroads in 2023. After unveiling sweeping new export restrictions in October, Washington appears to have successfully lobbied friendly governments including Japan and the Netherlands to join. Dutch Trade Minister Liesje Schreinemacher already said in November her government "will not copy the American measures one-to-one". Rival Nikon (7731.T) made sales of over 153 billion yen ($1.1 billion) in China, some 28% of total. In November, Dutch Trade Minister Liesje Schreinemacher confirmed the Netherlands was in talks with the U.S. government about new export restrictions.

A combination of targeted subsidies and local demand will help. China's dependence on foreign suppliers for lithography machines, used to print patterns onto silicon wafers, light-resistant wafer coatings known as photoresists and other vital tools cannot be understated. A 2021 report found that Chinese chipmakers buy less than a fifth of their equipment by value from local suppliers and that the country has localised less than 8% of annual equipment demand. China's equipment specialists, such as little-known firms NAURA Technology Group (002371.SZ) and Advanced Micro-Fabrication Equipment (688012.SS), are probably too small to effectively absorb massive amounts of government funding anyway. The majority of the funds will be used to subsidise the purchase of domestic semiconductor equipment by Chinese chipmakers.

The Chinese pharmaceutical giant may revive a buyout of its 32%-owned traditional medicine arm listed in Hong Kong. The state-backed group's latest bid for China Traditional Chinese Medicine (0570.HK) looks generous. China TCM's woes are a stark contrast to mainland-listed rivals, including some with heavy exposure to drugs presented as fixes to Covid-19. Assuming some of that enthusiasm can rub off on China TCM, that makes Sinopharm's latest offer look like a steal. Follow @mak_robyn on TwitterloadingCONTEXT NEWSSinopharm is considering reviving a bid for China Traditional Chinese Medicine Holdings, Bloomberg reported on Dec. 7, citing people familiar with the matter.

HONG KONG, Dec 1 (Reuters Breakingviews) - Covid-19 lockdowns and protests across China have highlighted the risks of the mutual dependence between Taiwan's Foxconn and its top customer Apple (AAPL.O). It makes 70% of the world’s iPhones, according to Fubon Research. Meanwhile Apple’s huge investments into Foxconn have paid off: the U.S. company is the most profitable smartphone maker by far. Foxconn has been scrambling to contain the fallout, offering bonuses to temporary workers and shifting production to other facilities. At the time, Foxconn said it was bringing the situation under control and was coordinating with other plants to increase production.

HONG KONG, Nov 24 (Reuters Breakingviews) - Pershing Square boss Bill Ackman is taking another tilt at the Hong Kong dollar , betting the government will be forced to break its link to the greenback. His logic is stronger today than when he took the plunge in 2011 but it’s up to Beijing, not Hong Kong. Back then Ackman famously predicted that the Hong Kong Monetary Authority would allow the local currency to strengthen against the U.S. dollar. A secular decline in Hong Kong might ultimately sabotage the peg at some point. On the other hand, Hong Kong is a city, not a country.

HONG KONG, Nov 17 (Reuters Breakingviews) - Naspers (NPNJn.J) has a new Tencent (0700.HK) quandary. In June, they launched an open-ended plan to gradually sell Tencent shares and use the proceeds to repurchase stock in both companies. The problem, however, is that Tencent stock has underperformed that of Naspers and Prosus. Over the same period Naspers shares rose 6% while those of its Dutch subsidiary are down 19%. “The Naspers Board and Prosus Board reiterate their continued confidence in Tencent's long term prospects and continue to believe that the share repurchase programme is in the best interests of Prosus, Naspers and their respective shareholders," they said in a statement.

HONG KONG, Nov 1 (Reuters Breakingviews) - Hong Kong’s third-quarter GDP plunged 4.5% from a year earlier as consumers and companies slashed spending. The government is trying to rally enthusiasm for its finance sector - as signaled by the flagship Fintech Week and Global Financial Leaders Investment Summit events happening this week. Beijing's commitment to stamping out Covid-19 infections on the mainland has halted vital flows of tourists and business people to Hong Kong. Moreover, Hong Kong's currency peg to the U.S. dollar means it must follow the U.S. Federal Reserve's rate hikes even though its inflation rate is less than half that in the United States. "Looking ahead, the markedly deteriorating external environment will continue to pose immense pressure on Hong Kong's export performance in the remainder of the year," the city government said.

HONG KONG, Oct 19 (Reuters Breakingviews) - Solving Hong Kong's brain drain problem need not be complicated. Leader John Lee hopes lower property taxes and a new visa scheme will persuade foreign talent not to move to destinations like Singapore. As a result, Hong Kong's mid-year population dipped 1.6% to 7.29 million - the steepest year-on-year drop on record. Non-residents are also eligible to apply for a refund of the extra stamp duty paid for buying property in Hong Kong once they become a permanent resident. Lee may be ignoring them, but the main policy solutions are staring him in the face.

☆ Xi wanted China to be at the tech frontier. 5 years on, tensions with the U.S. have dented that goal
▼ + stars: | 2022-10-14 | by ( Arjun Kharpal | ) www.cnbc.com time to read: +10 min

Major Chinese technology firms have been put on export blacklists since then. Looking ahead, the latest package of U.S. controls will make a huge dent in China's technology ambitions. Paul Triolo technology policy lead, Albright StonebridgeThings did not look as "bleak" for China's semiconductors in 2017 as they do now, Triolo said. China's tech crackdownA major hallmark of Xi's last five years is how he has transformed China into one of the strictest regulatory regimes globally for technology. China's technology giants are also posting their slowest growth in history, partly due to tighter regulations.

HONG KONG, Oct 14 (Reuters Breakingviews) - The world is facing a difficult 2023 as growth slows in most developed economies. The world economy will expand by 2.7% in 2023, per the IMF. Register now for FREE unlimited access to Reuters.com RegisterChina’s contribution to global growth will be more than three times greater than the United States. The South Asian nation produces roughly 3% of world GDP. Even if it expands by 6.1% as forecast, it will account for just 7.7% of global growth.

HONG KONG, Oct 11 (Reuters Breakingviews) - Washington's sweeping technology curbs on China today will have ripple effects across global supply chains tomorrow. But the ban may prompt Chinese chipmakers to hasten their progress in the commoditised parts of the market, embedding firms like Semiconductor Manufacturing International (0981.HK) in global supply chains. The measures mark a huge escalation in President Joe Biden's efforts to hobble Beijing's chip advances. Essentially, any company that uses American equipment will be restricted from selling relatively high-tech semiconductors or tools to Chinese firms. And because nearly every factory relies on crucial hardware and software from U.S. suppliers like Lam Research (LRCX.O) and Applied Materials (AMAT.O), the latest move potentially sets back Chinese chipmakers by years, if not decades.

HONG KONG, Oct 7 (Reuters Breakingviews) - Too much cash can be a problem sometimes, especially in South Korea. Samsung Electronics (005930.KS), meanwhile, may find that deploying its $77 billion war chest is getting trickier. The company estimates third-quarter operating profit at 10.8 trillion won ($7.7 billion), down 32% from a year earlier and below analysts’ expectations. Prices for so-called DRAM and NAND memory chips, a highly cyclical sector that's Samsung's biggest profit driver, have yet to bottom out. CONTEXT NEWSSouth Korea's Samsung Electronics on Oct. 7 announced earnings guidance for the third quarter of 2022.

☆ The U.S. and its allies are joining forces on chips. That could stop China reaching the next level
▼ + stars: | 2022-09-22 | by ( Arjun Kharpal | ) www.cnbc.com time to read: +9 min

Leading chipmaking nations including the U.S. are forming alliances, in part to secure their semiconductor supply chain and to stop China from reaching the cutting-edge of the industry, analysts told CNBC. But the semiconductor supply chain is complex — it includes areas ranging from design to packaging to manufacturing and the tools that are required to do that. "The other geopolitical significance is just related to Taiwan's central role in the semiconductor supply chain. Alliances being built that exclude ChinaBecause of the complexity of the chip supply chain, no country can go it alone. One is about bringing together countries, each with their "comparative advantages," to "string together alliances that can develop secure chips," Kotasthane said.

REUTERS/Steve Marcus - RC28BE9D5MZ7HONG KONG, Sept 20 (Reuters Breakingviews) - Seoul's foot-dragging on climate change is holding back Korea Inc. Last week the country's top conglomerate, Samsung Electronics (005930.KS), unveiled an underwhelming net-zero carbon emissions target. Most of that is probably from electricity for factories in South Korea, where renewable power is scarce. Yet President Yoon Suk-yeol's administration plans to lower its renewable-energy target for 2030, favouring nuclear power instead. The company has also joined RE100, a group of global corporations including Apple, Intel and TSMC that are committed to using 100% renewable energy across their own operations. Renewable energy will account for 21.5% of generation capacity by 2030, down from the previous target of 30.2%.

☆ China had a plan to dominate tech and become the world's most powerful country. It's all gone wrong.
▼ + stars: | 2022-09-08 | by ( Linette Lopez | ) www.businessinsider.com time to read: +15 min

Semiconductor chips are the tiny brains that power our technological world, from cars and cellphones to fighter jets and advanced missile systems. Right now China is awash in money for tech, but you need the right people and customers that trust you. Why China needs the chipsThe Chinese economy is big, but it isn't wealthy. In other words, China needs a more lucrative line of business the same way someone with credit-card debt needs a raise. The Made in China 2025 plan lays out a goal for domestically manufactured chips to meet 70% of China's semiconductor needs within three years.

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