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The continuing chip shortage, national security concerns in the US and regulatory pressures at home are all conspiring to make this an dose horribilis for Chinese tech companies.
Huawei suffered its biggest-ever decline in revenue in the first half of this year, as it was hit by the semi squeeze and US sanctions that are making it uncompetitive in the Android smartphone market.
Chair Eric Xu said that survival in spite of US pressure was Huawei’s overriding priority. The Chinese tech champion posted revenue of Rmb320.4bn ($49.5bn) in the first half, a decline of 29.4 per cent from the same period last year. Its consumer electronics arm’s revenue fell by nearly 47 per cent, or more than Rmb120bn.
Meanwhile, TikTok rival Kuaishou shed billions of dollars in market value after Chinese state media called for more regulation of the sector. The commentary in Chinese Communist party mouthpiece People’s Daily on Friday accused online video platforms of negatively influencing the nation’s youth. Shares in Kuaishou fell as much as 11.8 per cent in morning trading in Hong Kong before paring losses to be down 4.7 per cent as the market closed. That came on top of a record drop of 15.3 per cent on Thursday.
Stock prices have also dropped sharply for the tutoring industry amid forecasts that annual earnings will fall from $100bn to less than $25bn as Beijing constricts much of its market to a non-profit basis. We’ve a profile of Yu Minhong, founder of New Oriental Education, which has been hard-hit by the move.
Such troubles have attracted bargain hunters. Mike Mackenzie in New York reports retail investors are scooping up funds that track Chinese stocks after the sharp falls of recent weeks. The US-listed KraneShares CSI China Internet Exchange Traded Fund, which holds big names such as Alibaba, Tencent, JD.com and Meituan, has attracted more than $2bn of new money since the start of July. It has tumbled by a third so far in 2021. “Investors tend to expect elevated risk associated with emerging markets and while Chinese stocks have been hit hard, there is a view that this is a buying opportunity for some funds that are trading at cheap valuations,” said Todd Rosenbluth, head of mutual fund and ETF strategy at CFRA.
The Internet of (Five) Things
1. Facebook censured by FTC
The Federal Trade Commission has publicly castigated Facebook for disabling researchers’ access to its social media platform and making “misleading claims” that it was doing so to comply with a privacy agreement with the US agency. Facebook had suspended the accounts and pages this week belonging to a group of researchers at New York University who were studying its political advertising targeting practices.
2. Crypto bros stay loyal despite gathering crackdown
Why has the price of crypto held steady in the face of SEC chief Gary Gensler’s ‘Wild West’ remarks? To supporters, the “regulate, don’t obliterate” stance from the US authorities so far is a validation, writes Markets Editor Katie Martin. Gillian Tett looks at how soon the Federal Reserve might create an effective central bank digital currency. Fed involvement in crypto would represent a symbolic shift that could threaten the first-mover advantage that tokens like bitcoin have enjoyed.
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3. Vodafone close to Indian collapse
Shares in Vodafone Idea have plunged this week after the UK telecoms group’s Indian joint venture admitted it was heading towards “an irretrievable point of collapse” and its chair resigned. It has been losing market share to rivals such as Mukesh Ambani’s Reliance Jio after a fierce price war.
4. Why do some inventions arrive late?
We often overrate the eureka moment of the inventor’s doodle and overlook the importance of precursors that enabled or inspired the idea. Perhaps it is because innovation does not come naturally — most of us do what we see others doing, writes Tim Harford.
5. Sony’s podium finish with Canon, Nikon
Mirrorless cameras have broken Canon and Nikon’s dominance of the professional sports photography market, with Sony’s Alpha devices prominent at the Tokyo Olympics. Last year, worldwide shipments of mirrorless cameras topped those of DSLRs for the first time, reports FT Team Tokyo.
Tech tools — Dell UltraSharp 4K webcam
Dell’s UltraSharp Webcam is well named, offering pin-sharp pictures with its 4K HDR Sony sensor. This feels like a premium product with its weighty solid-metal barrel and magnetised lens cap. I liked the software controls as well, which allow you to switch easily between a wide-angle 90-degree view down to 78 degrees or 65 degrees. There is also a zoom slider, AI Auto Framing to keep you centred and a choice of filter presets such as Warm, Vibrant and Smooth. The stand could be better designed for perching securely on a monitor, but the one glaring omission is a built-in microphone, which I found an unnecessary inconvenience when setting up video calls and having to find a mike option elsewhere. Perhaps Dell reasoned headsets are common enough or anyone paying more than £250 for this would also be paying for a more professional standalone mike? The picture though is hard to fault and will definitely improve your image if you want to impress on video calls.
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