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China Roundup: A blow to US-listed Chinese firms and TikTok’s new global face

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China Roundup: A blow to US-listed Chinese firms and TikTok’s new global face

Hello and welcome again to TechCrunch’s China Roundup, a digest of latest occasions shaping the Chinese tech panorama and what they imply to individuals in the remainder of the world. It’s been a tumultuous week for Chinese tech companies overseas: Huawei’s mounting strain from the U.S., an enormous blow to U.S.-listed Chinese companies, and TikTok’s high-profile new boss.

China tech overseas

Further decoupling

Over the years, American traders have been pumping billions of {dollars} into Chinese companies listed within the U.S., from giants like Alibaba and Baidu to rising gamers like Pinduoduo and Bilibili. That may change quickly with the Holding Foreign Companies Accountable Act, a brand new invoice handed this week with bipartisan assist to tighten accounting requirements on overseas corporations, with the apparent goal being China.

“For too lengthy, Chinese corporations have disregarded U.S. reporting requirements, deceptive our traders. Publicly listed corporations ought to all be held to the identical requirements, and this invoice makes commonsense adjustments to degree the enjoying area and provides traders the transparency they should make knowledgeable selections,” mentioned Senator Chris Van Hollen who launched the laws.

Here’s what the laws is about:

1) Foreign corporations which might be out of compliance with the Public Company Accounting Oversight Board for 3 years in a row shall be delisted from U.S. inventory exchanges.

PCAOB, which was arrange in 2002 as a private-sector nonprofit company overseen by the SEC, is supposed to examine audits of overseas companies listed within the U.S. to stop fraud and wrongdoing.

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The rule has not sat effectively with overseas accounting companies and their native regulators, so over time PCAOB has negotiated a number of agreements with overseas counterparts that allowed it to carry out audit inspections. China is without doubt one of the few international locations that has not been cooperating with the PCAOB.

2) The invoice may also require public corporations within the U.S. to reveal whether or not they’re owned or managed by a overseas authorities, together with China’s communist authorities.

The query now’s whether or not we are going to see Chinese corporations give in to the brand new guidelines or relocate to bourses exterior the U.S.

The Chinese companies nonetheless have a three-year window to determine issues out, however they’re getting extra scrutiny already. Most lately, Nasdaq introduced to delist Luckin, the Chinese espresso challenger that admitted to fabricating $310 million in gross sales.

Those that do select to depart the U.S. will in all probability discover a hotter welcome in Hong Kong, attracting traders nearer to house who’re extra acquainted with their companies. Alibaba, as an example, already accomplished a secondary itemizing in Hong Kong final 12 months as town started letting traders purchase dual-class shares, a situation that originally prompted many Chinese web companies to go public within the U.S.

TikTok will get a expertise enhance 

The long-awaited announcement is right here: TikTok has picked its new chief government, and taking the helm is Disney’s former head of video streaming, Kevin Mayer.

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It’s comprehensible that TikTok would need a international face for its fast-growing international app, which has come below scrutiny from overseas governments over considerations of its knowledge practices and Beijing’s doable affect.

Curiously, Mayer may also tackle the function of the chief working officer of father or mother firm ByteDance . A more in-depth take a look at the corporate announcement reveals nuances within the appointment: Kelly Zhang and Lidong Zhang will proceed to guide ByteDance China as its chief government officer and chairman respectively, reporting on to ByteDance’s founder and international CEO Yiming Zhang, as trade analyst Matthew Brennan acutely identified. That means ByteDance’s China companies Douyin and Today’s Headlines, the money cows of the agency, will stay inside the purview of the 2 Chinese executives, not Mayer.

Huawei in limbo following extra chip curbs

Huawei is in limbo after the U.S. slapped extra curbs on the Chinese telecoms tools large, proscribing its potential to acquire chips from overseas foundries that use American applied sciences. The firm known as the rule “arbitrary and pernicious,” whereas it admitted that the assault would impression its enterprise.

Vodafone to assist Oppo broaden in Europe 

As Huawei faces strain overseas as a result of Android ban, different Chinese cellphone makers have been steadily making headway internationally. One of them is Oppo, which simply introduced a partnership with Vodafone to convey its smartphones to the cellular provider’s European markets.

All of China’s high AI companies now on U.S. entity listing 

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The U.S. has prolonged sanctions to extra Chinese tech companies to incorporate CloudWalk, which focuses on growing facial recognition know-how. This means all the “4 dragons of pc imaginative and prescient” in China, because the native tech circle collectively calls CloudWalk, SenseTime, Megvii and Yitu, have landed on the U.S. entity listing.

China tech again house

China’s new trillion-dollar plan to grab the tech crown (Bloomberg)

China has a brand new grasp plan to take a position $1.four trillion in every little thing from AI to 5G in what it dubs the “new infrastructure” initiative.

Fitbit rival Amazfit works on a reusable masks

The smartwatch maker is eyeing a clear, self-disinfecting masks, turning into the newest Chinese tech agency to leap on the bandwagon to develop virus-fighting tech.

ByteDance strikes into enterprise capital funding

The TikTok father or mother bankrolled monetary AI startup Lingxi with $6.2 million, marking one in every of its first investments for purely financial returns fairly than for a right away strategic goal.

Bilibili is the brand new Youtube of China

The once-obscure video web site for anime followers is now within the mainstream with a whopping 172 million month-to-month person base.

Xiaomi’s funding powerhouse reaches 300 corporations 

It’s a part of the smartphone large’s plan to beat the world of sensible house gadgets and wearables.

Alibaba pumps $1.four billion into content material and companies for IoT

Like Amazon, Alibaba has an enormous ambition within the web of issues.

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