China hits Alibaba with record $2.8 billion fine for behaving like a monopoly
China has ordered Alibaba to pay a record fine of 18.2 billion yuan ($2.8 billion) after antitrust regulators concluded that the online shopping giant had been behaving like a monopoly.
Chinese state media reported Saturday that the State Administration for Market Regulation had imposed the penalty following an antitrust investigation into Alibaba’s (BABA) “exclusive dealing agreements” that prevented merchants from selling products on rival e-commerce platforms — a practice known as “choosing one from two.” The fine is equivalent to 4% of Alibaba’s sales in China in 2019, state news agency Xinhua reported, and dwarfs the previous record penalty of $975 million handed out to American chipmaker Qualcomm (QCOM) in 2015. Bytedance and Baidu (BIDU) with fines for alleged monopolistic behaviors in corporate acquisitions, and floated new rules that could govern the operations at many tech firms. Tencent is reportedly facing scrutiny for alleged monopolistic practices at its social networking app WeChat. The company, which dominates online payments in China via WeChat Pay and owns hugely popular mobile games, said in a statement last month that a recent meeting with regulators was “voluntary.” “Tencent has had meetings with regulators on a regular basis, and this was a regular meeting,” it said. “We discussed a broad range of topics, mainly focused on fostering innovation and creating a healthy environment for industry evolution. Tencent has always and will continue to conduct our operations in compliance with relevant laws and regulations.”
Alibaba says it will invest to retain merchants and customers as it puts antitrust fine behind it
Alibaba executives speak out after an antitrust probe found the company to have abused its market position Company CEO Zhang Yong said Alibaba will make efforts to retain merchants, including cutting fees for them Mid-market brands such as Polo Ralph Lauren, Tommy Hilfiger and Fila operate flagship stores on both JD.com and Alibaba’s Tmall. Sportswear brand Adidas has over 15 and 30 million followers on the two platforms respectively. Although luxury brands Burberry, Dior and YSL only run flagship stores on Tmall, their products can also be found on JD.com’s self-operated stores.
The company will pay the SAMR fine from its reserves of nearly US$70 billion of cash and cash equivalents. This will be reflected in the company’s financial report for the quarter ended March 31 under general accounting (GAPP), but excluded from non-GAPP accounting, said chief financial officer Maggie Wu.Tsai said that Alibaba and some of its peers remain under review by the market regulator for their past mergers and acquisitions, but he was not aware of any other anti-monopoly-related investigations. China has been trying to rein in the unchecked growth of its internet sector after leaving the industry largely untouched for years. The Alibaba case is considered a precedent in the government’s effort to regulate the country’s Big Tech using anti-monopoly rules,
according to analysts
Alibaba antitrust fine shows Beijing views tech giant as threat
Xi seeks to strengthen his grip ahead of 2022 Communist Party congress The $2.8 billion fine imposed on Alibaba for violating antitrust laws underscores Chinese President Xi Jinping’s intention to tighten control of rapidly growing internet businesses and solidify his standing ahead of an important Communist Party congress next year. The clampdown on Alibaba also appears to be the result of a struggle for power in the political world. The Chinese Communist Party is set to make a major personnel reshuffle at its twice-a-decade congress in autumn 2022. Alibaba’s growth is said to have been backed by relatives and others connected to the so-called Shanghai clique led by former President Jiang Zemin. There have been reports that a grandson of Jiang indirectly owns Ant shares. Those close to Xi became very angry when they saw a secret list of those with interests in Ant’s initial public offering, according to sources. The list reportedly included many relatives and others connected to retired leaders. Back in 2018, Xi amended the constitution to remove a term limit for the president, a move seen as his resolve to serve a third term beyond the 2022 congress. There is growing speculation that Xi, in hoping to stay in power over the long term, is penalizing Alibaba to weaken powerful figures with links to the company.
China’s record fine on Alibaba sets an example for technology giants to toe the regulatory line
The record 18.2 billion yuan fine was equal to 4 per cent of Alibaba’s 2019 revenue but shy of the 10 per cent maximum under China’s antitrust law The regulator factored in the “duration and degree” of Alibaba’s misconduct, and its “in-depth self-examination” and “proactive rectification”
Alibaba investors collect US$39.6 billion in stock’s best rally since January as antitrust penalty removes gloom
Shares of Chinese e-commerce leader rose 6.5 per cent in Hong Kong, adding US$39.6 billion to its market capitalization Before Monday, stock had lost US$230 billion in value since November 3 when authorities abruptly suspended Ant Group IPO in a warning shot to industry
China’s economy not facing K-shaped rebound from virus crisis: former CSRC chief
China is not facing a two-pronged economic rebound or the K-shaped rebound from the Covid-19 crisis, but the economy is on an overall upward trend, said Xiao Gang, a member of the National Committee of the Chinese People’s Political Consultative Conference (CPPCC) and former head of the country’s securities regulatory commission (CSRC), at the 2021 Tsinghua PBCSF Global Finance Forum on Saturday.
China’s exports expected to soar 30% in Q1 amid rapid economic recovery
Driven by robust demand due to the rapid recovery in major economies, China’s exports are expected to rebound sharply in the first quarter of 2021 to reach a growth of about 30 percent year-on-year and lift GDP growth to 18 percent in the quarter, according to analysts.
China’s exports, imports seen staying buoyant in March: Reuters poll
Improved global demand and a favorable base effect are likely to have kept China’s exports buoyant in March, while higher oil prices will have been boosted its imports, a Reuters poll showed on Monday. China’s trade surplus is expected to be $52.05 billion in March, following a surplus of $103.25 billion in the first two months of the year, according to a median forecast in a Reuters poll of 27 economists. The data will be released on Tuesday.
American Rescue Plan: US stimulus seen widening trade deficit that sparked Trump’s trade war with China
Higher US interest rates and widening trade imbalance with China said to be side effects of President Joe Biden’s US$1.9 trillion American Rescue Plan With bilateral relations already at their lowest point in decades, a rising trade deficit could add fuel to the fire
China GDP: ‘new uncertainties’ ahead for economy, Premier Li Keqiang warns, even with double-digit growth expected
China is set to release its first quarter gross domestic product (GDP) figure on Friday, with a double-digit growth figure expected after the economy record shrank by a record 6.8 per cent in the first three months of 2020 But Premier Li Keqiang told a forum of economists and entrepreneurs on Friday that ‘the current complex and severe international environment has added new uncertainties’ to China’s economic recovery He said that the country will continue to impose targeted structural tax cuts in a bid to keep the intensity of ensuring jobs, livelihoods and market entities, while US President Joe Biden is looking to raise corporate income tax rates to fund his proposed US$2.3 trillion infrastructure spending plan. Li again prioritised employment as “the foundation” of consolidating the economy. “(The country will) boost flexible employment, strive to achieve relatively full employment and increase residents’ income,” he said. “(China will) expand the opening up to the outside world, stabilise trade and foreign investment, maintain the basic stability of the yuan exchange rate at a reasonable and balanced level, and maintain the stability and security of the industrial chain and supply chain.”
China economy: bank loans hit record high in first quarter as authorities balance growth and debt risk
China’s bank lending in the first quarter hit a record high of 7.67 trillion yuan (US$1.17 trillion) Banks extended 2.73 trillion yuan in new yuan loans in March, up from 1.36 trillion yuan in February
Chinese firms to set up quantum chip R&D lab to catch up with global leaders
Move aims to catch up with global leaders, faces long way ahead: insiders For example, the temperature needs to be close to absolute zero for a quantum chip, so the cooling device needs be huge, compared with a small fan as the cooling equipment for chips in today’s personal computers or laptops. Many low-end chips, which don’t even need a fan, can be cooled using normal ventilation. However, as firms are rushing to field of quantum chips, analysts urged caution after recent failed projects in the chip industry such as the fallout of Wuhan Hongxin Semiconductor Manufacturing Co. “Don’t rush to an industry with a bright future blindly,” Wang Peng, an associate professor at the Gaoling School of Artificial Intelligence at Renmin University of China, told the Global Times on Sunday.
Chinese tech firms can’t win trust in the West, but the companies aren’t the biggest culprit
Foreign suspicions over Beijing’s relations with Chinese tech companies are unlikely to go away soon, analysts say Chinese firms such as ByteDance, Xiaomi and DJI, which have found global success, are struggling to ease data privacy concerns
US-China tech war: Washington intensifies pressure on Beijing in proposed new policy of ‘strategic competition’
The Strategic Competition Act of 2021 sharpens the US government’s focus on thwarting China’s economic and hi-tech ambitions Analysts see the legislation offering no surprises for China, as more domestic hi-tech entities are hit by US trade sanctions
China-US tech war ‘in crucial decade’ as developing nations pick sides
Wider access to internet and urban growth could reshape global networks by 2030, Washington think tank says in report With China and the US set to compete for the spoils, Beijing has begun building its ‘digital silk road’
In a quest to rein in its tech giants, China turns to data protection
China’s Personal Information Protection Law (PIPL) lays down for the first time a comprehensive set of rules around data collection and protection. Along with a new antitrust law, the data protection law is seen as part of a broader effort by Beijing to rein in the power of its technology giants such as Alibaba and Tencent. But the new regulation also has a “geopolitical factor” as tensions between China and the U.S. continue, one expert said. That is creating a regulatory model for the next-generation internet.
China as a Third World Country
There is much discussion about the surging Chinese economy and the expanding international influence of China. There is no question that China’s economy has consistently expanded in the last 40 years, since the death of Mao Zedong. But Mao had created an extraordinarily poor China, based on ideology and the desire to eliminate the power of the old economic elite that was concentrated along the coast. Mao feared them as a threat to the revolution. In fact, he feared the bourgeois tendency toward wealth and comfort as a challenge to the revolution. He throttled the Chinese economy, and as a result, virtually any rational behavior by Chinese rulers would generate dramatic growth. China, with a vast potential workforce and a basically sophisticated culture, inevitably surged by shedding the malevolent and strange grip of Mao.
Coronavirus recovery: why US dollar’s puzzling strength is only temporary
Investors expecting the currency to fade have been flummoxed by a reinvigorated US economy and a reassertion of the theme of US exceptionalism Renewed dollar depreciation will come eventually from the fading sugar rush of fiscal stimulus and as other countries’ vaccine programmes catch up
Research Predicts China Bitcoin Carbon Emissions Will Reach 130M Metric Tons In 2024
With the vigorous development of Bitcoin, the power consumption and carbon emissions caused by the operation of the Bitcoin blockchain are also increasing day by day. Researchers from the Chinese Academy of Sciences and Tsinghua University recently conducted a modeling analysis and believe that the annual energy consumption of the Bitcoin mining in China is expected to reach a peak of 296.59 trillion watt-hours in 2024, and will generate 130 million metric tons of carbon emissions. Related research has been published in the scientific journal Nature Communications recently.
Carbon-neutral goal: CLP eyes hydrogen-powered plants to cut emission as Hong Kong prepares to update 2050 neutrality target
Power plants generate almost two-thirds of Hong Kong’s carbon emission, with CLP as the larger contributor of two producers in the city CLP reduced its overall carbon emission to 0.57kg per kilowatt-hour in 2020 from 0.62 in 2019, aims to reach 0.15 by 2050
Low-carbon economy war new power games
These major commitments reflect a rare consensus among countries. But there are many questions to be answered. We still don’t know how to achieve these commitments. Nor what they will be achieved by. We are still not clear about what rules will be used to achieve the goal, and who will take the lead in achieving them. Moreover, how funds will be invested to achieve these goals remains unknown. In this regard, 2021 can be considered the year that China starts its journey to achieve carbon neutrality. It can also be regarded as the year when the world’s low-carbon economic competition begins. These new starts have quite obvious impacts on the transformation of the international landscape, and the game of great powers.
China raises ‘deep concerns’ over Japan’s plan to release Fukushima plant water into ocean
Beijing has asked Tokyo to take ‘responsible attitude’ to the disposal and called for transparency and consultation with neighbouring countries A formal decision is expected on Tuesday to gradually release treated water from the damaged nuclear plant into the Pacific Ocean
China digital currency: Biden administration steps up scrutiny of e-yuan over potential threat to US dollar dominance
The People’s Bank of China (PBOC) has rolled out trial issuance of a digital yuan in cities across the country, putting it on track to be the first major central bank to issue a virtual currency Members of the US Congress have also been increasingly interested in a digital US dollar, and asked US Federal Reserve chair Jerome Powell and US Treasury Secretary Janet Yellen about the issue in hearings earlier this year
China’s central bank should be more like the Fed, top researcher says
The rapid rise of local government borrowing is the biggest systemic risk in China today, CASS researcher Zhang Bin says Beijing should take its lead from the US Federal Reserve and adopt a more aggressive monetary policy
Innovative ways to resume international travel
In conclusion, it is important for innovative ways to resume international travel. Safety needs to be balanced with equity, for this it is imperative that all actors engage in a constructive manner. A number of observers have suggested that vaccine passports/covid status certificates should be made optional, and that there is nothing wrong in using technology per se but it should not be thrust on anyone. The fight against the pandemic and revival of international travel are a golden opportunity for countries to reverse the increasing sense of insularity and inequity which has risen in recent years.
Think Sustainability Doesn’t Matter? Think Again
The brands that manage to create a differentiated, innovative, and value-creating sustainable business model — rather than doing what everyone else does — will be winners in the future. Before the pandemic, consumers would occasionally ask about a brand’s sustainability, but it would never lead to actions. But now, a dissatisfactory answer leads to the customer immediately leaving the store and never coming back. When a customer believes a sustainability story, it doesn’t happen randomly. It only comes when a brand competitively benchmarks, strategizes, and masters its story delivery.
Top 10 IPOs by China’s billion-dollar tech start-ups to watch for in 2021, including Megvii, Douyin, Didi Chuxing and ByteDance
China contributed 23 per cent of the 611 unicorns in the world, collectively worth over US$2 trillion as of March A record 143 mainland Chinese companies completed an IPO in the first three months of this year, amassing US$23.6 billion of funds
How the digital yuan stablecoin impacts crypto in China: Experts answer
China has been discussing the possibilities of national digital currency for half a decade, and the Chinese digital yuan project — referred to as the Digital Currency Electronic Payment, or DCEP — has years of history. Back in 2014, the People’s Bank of China set up a research group “to study digital currencies and application scenarios.” The research team was conducting a digital currency study and reportedly considering issuing its own digital currency. In 2016, the PBoC announced plans to develop a digital currency of its own and started to hire blockchain experts. The same year, China’s State Council included blockchain technology in its 13th Five-Year Plan.
China’s economy, industry to benefit from corporate tax cut, especially of SMEs: analysts
While some enterprises said that they have reduced costs from China’s tax and fee reduction policies and survived last year amid COVID-19, some small and medium-sized enterprises (SMEs) find it difficult to benefit from preferential policies.
Comment: What Asia’s growth prospects mean for the global economy
Rising incomes in Asia will probably be the most important investment story of the 2020s. Asia is home to 60% of the world’s population, with both China and India each accounting for about 18% of the global total. Mike Bell outlines the significance for international investors. In short, long-term growth is available at a more reasonable price in Asia than elsewhere in the world. We think investors with a long-term investment horizon should focus on the exciting opportunity presented by gaining reasonably priced exposures to rising incomes and consumption in China, India and the rest of Asia.
Understanding economic coercion
In December 2020, China blocked Australian coal imports after an increasingly tense political confrontation between the two countries. In August 2019, Japan strengthened restrictions on exports to South Korea following a South Korean Supreme Court decision on disputed historical issues between the two countries. This economic coercion inflicts mutual harm because it disrupts economic exchange. China’s measures against Australia create uncertainty and increase the costs of doing business. Japan’s restrictive measures largely backfired after Japanese companies shifted production to South Korea and Europe to supply the South Korean market. The deployment of coercive economic measures might appear impractical in the face of these costs
Why China is banking on Suez and plans for a new Egyptian capital
Egypt, a long-standing US partner, has moved much closer to Beijing since President Abdel-Fattah el-Sisi came to power in 2014 China has invested billions of dollars in projects, including an ambitious plan to move the seat of government out of Cairo to a purpose-built new site
US-China rivalry: is the pressure on for Asean countries to choose sides?
While Southeast Asian nations have maintained a studied neutrality as Beijing and Washington clash over issues such as the South China Sea, experts say some alignment has already happened But as the interests of China and the US diverge, the window of opportunity to not officially take a side is narrowing
China’s shadow hangs over private preparations for Boris Johnson’s G7
British Prime Minister Boris Johnson talks with business owners during a visit to Lemon Street Market in Cornwall, England, on April 7. Some European government officials have warned of the danger the G7 comes to be seen as an anti-China alliance, especially with Johnson inviting India, Australia and South Korea
US-China relations: military tensions continue to rise over Taiwan
All three sides flex their military muscle in South China Sea, Taiwan Strait this week Military commentator says presence of warplanes and warships in region now the norm
Too early to talk about boycotting China’s Winter Olympics: Blinken
US secretary of state says boycott discussions premature but promises ‘concrete action’ against Xinjiang-made products In wide-ranging Sunday interview, he also reaffirmed support for Taiwan’s ability to defend itself
China-Australia relations: is Canberra taking a ‘less combative’ stance with Beijing despite tensions?
Australia has seemingly moved towards “less combative” interactions with China, despite ongoing tensions and alleged human rights abuses in Xinjiang, after Prime Minister Scott Morrison and his cabinet expressed a desire for a “positive” and productive relationship. There has been no ministerial-level contact between the two governments for the past year after a fallout that started over calls for an investigation into the origins of the coronavirus and spiralled into a broad trade conflict.
US navy warns China ‘we’re watching you’ as destroyer shadows Liaoning carrier group
A photo of the captain of the USS Mustin taken while shadowing the PLA warships has been described as a form of ‘cognitive warfare’ Both sides are building up their forces in the East and South China seas by sending carriers and escorts to the region
Beijing’s foreign policy priorities
China seeks to cement a multi-polar world order in which no other state can “interfere” with what it sees as “internal affairs.” Such a world would be incompatible with the EU’s values and political identity, says Jacob Mardell.
Beijing asks challenged Wolf Warriors to find wisdom in China’s past
Foreign ministry has diplomats studying Communist Party history as it celebrates centenary Wolf Warriors are digging in against criticism from the West but even some government insiders question the value of hard-line diplomacy
Why in US eyes, China’s maritime ambition can only appear as a threat
America’s own journey to power colours its perception of Chinese intention. What to Beijing is a defensive response to historical lessons is seen as a threat to US naval supremacy More understanding on both sides can help prevent grievous policy miscalculation
Communist Party should not be overreliant on big data, academic says
A digital chasm exists between urban and rural party members, professor at East China University of Political Science and Law says Party officials need to be aware of the ‘human factors’ in making decisions, he says
China’s COVID-19 vaccine output to hit 3 billion by year-end – official
Zheng Zhongwei, who also heads a team coordinating the country’s COVID-19 vaccine development projects, made the comment during an industry event in the city of Chengdu in southwestern China’s Sichuan province
Revolutionary mRNA vaccines made by Chinese firms will be ready to hit market by end of year, says industry chief
Made in China jabs using genetic technology could soon be available, while BioNTech’s Chinese partner is seeking approval to use the vaccine on the mainland The drugs that use messenger RNA to stimulate the immune system reported high efficacy rates following clinical trials
China considers mixing Covid-19 vaccines to offer more protection
Gao Fu, the head of the country’s CDC, says the health authorities are looking at ways to overcome relatively low efficacy rates Another option under consideration is to change the interval between doses, adjust the dosage or offer an extra jab
China population: census results to confirm a worrying demographic picture
Population data is vital to gauging China’s future economic and social development So-called demographic dividend, the main driving force of China’s economic growth, looks to become a curse of demographic liability
In China, it’s good to be rich, but not too rich
In China, it’s good to be rich, but not too rich. Getting to the top of the billionaire rankings carries great risks. Just take a look at those who were once first among plutocrats. All got into trouble with Beijing — be they real estate developers or big tech bosses.
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