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Showing posts with label Business and Economy. Show all posts
Showing posts with label Business and Economy. Show all posts

Saturday 27 April 2019

Highlights of Xi's keynote speech at second Belt and Road Forum

https://youtu.be/qB80PG8C-I0
https://youtu.be/VWid1poNGuk
https://youtu.be/L67WJiO_CQk
https://youtu.be/eWOMhvTrrOg

Chinese President Xi Jinping delivered a keynote speech at the opening ceremony of the Second Belt and Road Forum for International Cooperation (BRF) in Beijing on Friday. Here are the highlights:

On Belt and Road Initiative

Xi said that the Belt and Road Initiative (BRI) aims to build a trade and infrastructure network, adding that joint building of the Belt and Road has opened up new space for the world's economic growth.

Based on the principles of equality and mutual benefit, the BRI focuses on connectivity and practical cooperation to achieve win-win outcomes and common development.

The principle of extensive consultation, joint contribution and shared benefits should be upheld, Xi said, and open, green and clean approaches should be adhered to.

The goals of high-standard, livelihood-improving and sustainable development should be achieved, according to Xi.

China will work with other parties to promote a coalition of sustainable cities and an international coalition for green development under the Belt and Road Initiative, Xi said.

High-quality infrastructure under BRI

Xi highlighted building infrastructure of high quality, sustainability, risk resilience, reasonable pricing, inclusiveness and accessibility under the BRI. 

Calling infrastructure the cornerstone of connectivity and a bottleneck of development confronting many countries, Xi said building infrastructure with such standards could help countries give full play to their advantages in resources and better integrate into the global supply, industry and value chains for interconnected development.

On people-to-people connectivity

China will support 5,000 people from the innovation sector in Belt and Road countries in conducting exchanges, training programs and joint research over the next five years.

China will work with other participants of the Belt and Road Initiative to promote scientific and cultural exchanges, set up joint science labs, build science and technology parks, and promote the transfer of technologies, Xi said. 

A total of 10,000 representatives of political parties, think tanks and non-governmental organizations from countries participating in the Belt and Road Initiative will be invited to China for exchanges in the next five years.

On trade and opening-up

Xi said that China will increase imports of goods and services on a larger scale, slash its negative list on imports and will negotiate and sign high-standard free trade agreements with more countries. 

China will further lower its tariff rates and the country would continuously open up its market and welcome quality products from around the world.

China is also willing to import more competitive farm produces, finished products and services and will allow foreign investors to operate businesses in more sectors with controlling or full stake.

China prohibits forced technology transfer

China will step up protecting the legitimate rights and interests of foreign owners of intellectual property rights, and prohibit the forced transfer of technology, Xi said.

It will create a business environment in which the value of knowledge is respected, Xi said.


(With input from Xinhua)

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Friday 15 February 2019

Mega trends EAC must address


THE government is to be congratulated for establishing the new Economic Action Council that will give a better sense of direction and priorities for the nation to overcome the short-term economic challenges, such as rising cost of living, cost of doing business, restoring investor confidence and promoting sustainable economic recovery.

The Council should move with a sense of urgency. Its composition is balanced with a cross-section of representation, including from the orang asli community and consumer associations, which is praiseworthy as it does not just represent business interests. The presence of distinguished economists is also reassuring.

But I propose that the EAC also develops a longer term National Economic Strategy. To move forward, we need to identify the key mega trends that will impact on the nation in the next five to 10 years and then develop a comprehensive and holistic national strategy to address them.

I have identified here 10 strategic shifts or mega trends that need to be addressed.

1. On the international scene, we see a shift from geo-politics to geo-economics, requiring nations to adopt a geo-strategic response. This can be seen from Brexit and the US-China trade war. Geo-economics, including the control over economic assets such as oil and gas, will have a greater impact on international diplomacy. Increasingly, we will see economic and trade diplomacy becoming more important than political diplomacy to maintain global peace, stability and prosperity. We need to be able to step up to this level to analyse and strategise our response to geo-economic and geo-strategic challenges.

2. We also see a shift in the global centre of gravity from West to East with the rise of China and re-emergence of Japan as well as the growth of India and Korea. We need to identify a strategy to succeed in enlarging our presence in these markets and create new opportunities for our entrepreneurs and SMEs in China and Japan.

3. The world is also witnessing a rapid technological shift towards digital disruption and the Fourth Industrial Revolution with growing interest and applications in artificial intelligence, robotics and the Internet of Things. Big Data can be a strategic competitive advantage. The impact of drones and driverless vehicles will make a big impact on society. What is our national strategy to deal with these new technological advances? Hopefully, the EAC will also develop a strategic game plan to deal with these challenges and opportunities.

4. We also see an eco-sustainability shift with growing concern over climate change. This will drive demand for green technology and clean energy. We have a dynamic Energy, Technology, Science, Climate Change and Environment Minister. More must respond to support this ministry and its institutions. We need to embrace clean energy faster and more comprehensively.

5. Demographic shift will lead to an ageing society and a hollowing out of the demographic middle where we will have more aged elderly and younger cohorts below 30 but fewer of the middle-aged. It has been estimated that 20% of our population will be above 60 by 2040. Hence, we need new strategies and action plans to deal with the changing demographics.

6. Consumer shift will see the rise of e-commerce as we move from bricks to clicks. The rise of online business and e-commerce will not only impact on retail business but also on traditional banking, education and healthcare with the risk of fintech (financial technology), online learning and distance education, and telemedicine (pic). We need to embrace and adapt to these trends.

7. Globally, we also see a political shift from liberalism to the emergence of the right. The rightward shift led to the election of Donald Trump as president of the United States and is also partly the cause of Brexit. Is this era the end of liberalism? What can we do to bring people back to the centre? This trend has also led to a consolidation of the Malay right-wing with the strengthening ties between Umno and PAS. While the immediate focus of the EAC is economic, it also needs a strategy to deal with this phenomenon as it will impact on race relations and religious harmony, which are so essential for peace and stability to facilitate business and economic growth.

8. A shift in wealth and income has caused growing inequalities. The income gap between the highest earning population and the bottom 20% has grown. The income gap and inequalities can destabilise peace and stability. New thinking and new strategies need to be adopted to overcome the growing inequalities in our society.

9. Urbanisation shift arising from continued rural-urban migration will also cause urban poverty to rise. Urban poverty is a challenge that must be urgently tackled. The urban poor is a microcosm of Malaysian society as it comprises all ethnic groups. The rising cost of living affecting the urban poor needs to be prioritised.

10. A freedom shift is very evident after the 14th General Election with Malaysians feeling more free. This is good as it will lead to stronger support and protection of human rights such as freedom of speech, freedom of expression and freedom of association.

I believe the above 10 strategic shifts and key challenges are important priorities the government and the people must work on together.

We should have new policies to address these challenges. In formulating new policies, it is important to focus on the 4Cs – consistency, clarity, certainty and coherence.

The new Malaysia also needs the 3Is – integrity, inclusiveness and innovation. Old problems need new innovative solutions and new problems also need new ideas to resolve.

We should work together to address the above key challenges. We need to come together as a nation seeking national reconciliation and unity.

With a common purpose, we can move forward with renewed determination to build a new Malaysia that is sustainable and not a flash in the pan.

As the government has already established the EAC, I propose that it should also consider establishing a National Strategy Commission to plan future scenarios for the nation as well as effective strategies to overcome them.

A National Strategy Initiative should also be established to carry out in-depth Futures Studies for the country.

Kingsley Strategic Institute | Where Leaders Meet




TAN SRI MICHAEL YEOH OON KHENG

President Kingsley Strategic Institute




 

The Prime Minister’s Office (PMO) announced the establishing of the Economic Action Council (EAC), which will respond to and take acti.

Saturday 9 February 2019

Better to buy a car or a house first?


Given a choice, would you prefer to get a loan to buy an item that depreciates over a short period which is deemed as “bad debt” or commit on a “good debt”, which is to purchase a house or asset that will appreciate in the long term?

A car used to be a symbol of freedom and ease of mobility. I could understand the dilemma of having to choose between a house and a car a decade ago.

Even then, we should still have chosen a car within our means to manage our financial position.

Today, with public transportation and the availability of ride-sharing services such as Grab Car, we can now really have the option of buying a house first. This gives us both shelter and value appreciation.

This choice has just been made easier with Budget 2019 and the recent announcement by the Finance Ministry.

The government has rolled out several measures to assist homebuyers, including stamp duty exemptions.

Homebuyers will get a stamp duty waiver for memorandum of transfer (MoT) for the purchase of houses priced up to RM1mil, during the six-month Home Ownership Campaign (HOC) from January to June 2019. In addition, the stamp duty on loan documentation is fully waived up to RM2.5mil.

Besides that, the Real Estate and Housing Developers Association (Rehda) has also agreed to cut the prices of its completed and incoming units by at least 10%.

When I talk to potential homebuyers, they always ask about the right time to own property.

There is no perfect time to buy a house on foresight. If the price is within your means, and you plan to buy it for own stay or as a long-term investment, then anytime is a good time.

However, with the property market at the bottom half of the cycle now, this could be a good time to commit to a house with the attractive tax incentives rolled out by the government.

Homebuyers can grab the “duty-free” opportunity now to explore the property market. Those living in the Klang Valley will be able to find their dream home during the Homeownership Campaign Expo at the KLCC Convention Centre from March 1-3.

The campaign is jointly organised by Rehda and the Housing and Local Government Ministry. Besides having all developers under one roof, the ministry will also be featuring homes under RM300,000 by PR1MA, SPNB, PNB and others.

The Homeownership Campaign was first held in 1998 to lessen the burden of homebuyers and to encourage homeownership. It is re-introduced after two decades now with the same objective.

For homebuyers who don’t like the risk of buying a house under construction, there are plenty of completed units for sale in the campaign.

Buying a house can be emotional and uncertain for many homebuyers. However, in the long run, we can rest assured that we are buying an asset that will appreciate.

For homebuyers, always buy within your means as you can upgrade your house in the later stage of your life.

In this auspicious Chinese New Year, I hope you decide to prioritise a new house over a new car. Gong Xi Fa Cai!

By Alan Tong . . . Food for Thought

Datuk Alan Tong has over 50 years of experience in property development. He was the World President of FIABCI International for 2005/2006 and awarded the Property Man of the Year 2010 at FIABCI Malaysia Property Award. He is also the group chairman of Bukit Kiara Properties. For feedback, please email bkp@bukitkiara.com


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Saturday 26 January 2019

What can we learn from WEF 2019 世界经济论坛2019年会闭幕式

https://youtu.be/9lJUrzHq8SA

Davos Special: The Belt and Road Initiative 

The Belt and Road Initiative has been generating a lot of excitement at Davos. It will direct investment in infrastructure across Asia over the coming decade, but the ambitious project faces challenges in tackling debt, supporting sustainable development and uniting a fractured international community. How can the government and private sectors harness the risks to guarantee the 1.5-trillion-U.S.-dollar investment will succeed in kick-starting development and growth? Our diverse panel reflects the global outlook of the project. We have Xu Niansha, chairman of the China Poly Group; Heng Swee Keat, Singapore's minister of finance; Ilham Aliyev, president of Azerbaijan, and Wang Yongqing, vice chairman of the All-China Federation of Industry and Commerce. #Davos2019 #BeltandRoad

Chinese VP calls for structural reform to address global imbalances

Chinese Vice President Wang Qishan on Wednesday called for further development as a solution to addressing imbalances in the process of economic globalization. Subscribe to us on YouTube: https://goo.gl/lP12gA

https://youtu.be/dxRSw4E2094

  Exclusive with China's top SOE watchdog, executives at WEF 2019

 -- World Insight with Tian Wei talks to the Chairman of State-owned Assets Supervision and Administration Commission of China on the sidelines of the Davos forum. He shared his thoughts on the speed and depth of reforming China's state-owned enterprises. -- Tian Wei also put her finger on the pulse of reforms inside China's top state-owned enterprises in exclusive interviews with the top executives of China's Poly Group and China Energy. #WEF

  https://youtu.be/3RA9XweW70E

Monday 3 December 2018

Salary hike prospects ‘bleak’



THE Malaysian Employers Fund (MEF) announced its findings of four latest publications for 2018. The publications focus on the forecast of salary increases and bonuses for 2019. The outlook was “bleak”, according to the survey due to the global recession, increasing social costs and political uncertainties following GE14 which were among factors influencing the employers’ cautious attitude.

A few incentives were placed into the labour structure of the companies surveyed including productivity linked wage system (PLWS) and the Discrimination Reporting Procedure.

About 90% of companies and more indicated that the main reasons that they implemented PLWS was to reward good employees followed by aiming to improve productivity (which more than 80% responded) and to motivate average employees (more than 70%).

The findings also focused on the types of leaves provided where all participating companies provided annual leave and sick leave for top/senior managers, managers, execu- tives and non-executives.

The average total hours of total working hours per week for top/senior managers and managers were considered where they worked 41 hours compared to the executives where the average total working hours per week was 42 hours. In the case of non-executives the average total working hours was 43 hours.

About 42.5% of respondent companies implemented flexible working hours at the workplace. With implementation of flexible work arrangements 82.4% of the respondent companies indicated that there was increased employees’ engagement, commitment and satisfaction, quality of work and quantity of output (62.7%) and the company’s ability to retain talent (62.7%).

The survey for executives and non-executives were participated by 242 companies from manufacturing and non-manufacturing sectors. The executive report covered 160 benchmark positions of 14330 executives while the non-executives report covered 324654 non executives with 109 benchmark positions. - The Star

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Tuesday 30 October 2018

Behind crazy rich Singapore’s mask, a growing class divide

Inequality bites: In Singapore, households with accumulated wealth and connections over past generations, like the hit movie’s protagonist Nick Young’s family and friends, can pass on advantages to their offspring. — AP
Inequality bites: In Singapore, households with accumulated wealth and connections over past generations, like the hit movie’s protagonist Nick Young’s family and friends, can pass on advantages to their offspring. —AP
Two Singapores: Poverty has always existed in the cosmopolitan city state, but the setting of the hit movie ‘Crazy Rich Asians’ has seen a widening income gap in the past few years. — Reuters

 There is another side to the Lion City's fabled wealth: a widening gap between rich and poor that is forcing its citizens to question whether their home is really the land of opportunity they once thought.


IN the background, a luxury goods shop, a stooped elderly cleaner sweeping its storefront; on one side of the bridge sits expensive condominiums, bars and restaurants, on the other, rental flats housing Singapore’s poorest.

These scenes unfolded in a documentary titled Regardless of Class by Channel News Asia released on Oct 1, with a security guard revealing he felt as though he was not treated like a person. A cleaner said: “I know I’m invisible. I have to get used to this, and learn to stop caring.”

Poverty and inequality in the city state – the setting of the hit movie Crazy Rich Asians and where the per capita income is among the highest in the world, hitting US$55,000 (RM228,494) last year – has always existed.

But in the last year, Singaporeans have been confronted with discomfiting evidence of growing social stratification, shaking to the core a belief that meritocracy can smooth out unequal beginnings and lead to more equal outcomes.

Sociologist Tan Ern Ser from the National University of Singapore said class origin or background now had a greater influence on opportunity and social mobility, as the country faced slowing growth, job losses and obsolescence and an ageing population.

Singapore’s Gini coefficient, a measurement of income inequality from zero to one – with zero being most equal – has fluctuated above 0.40 since 1980 before adjusting for taxes and transfers. It was 0.417 last year. In the United Kingdom, it was 0.52 in 2015, the United States was at 0.506, and Hong Kong reached a record high of 0.539 in 2016.

Experts say inequality in itself is not worrying – sociologist Tan said it could even “be good for motivating people to want to do better”.

But in Singapore’s case, it has allowed households with accumulated wealth and connections over past generations to pass on advantages to their offspring, helping them to shine, while those without the same social capital and safety nets are forced to toil harder to do the same.

As Singapore University of Social Sciences economist and nominated Member of Parliament Walter Theseira put it: “If you can buy advantages for your child, such as tuition and enrichment, they are going to end up doing better in terms of meritocratic assessments.”

Donald Low, associate partner at Centennial Asia Advisors and the former associate dean at Lee Kuan Yew School of Public Policy, said Singapore’s meritocratic and universal education system for the past 50 years led to a great deal of social mobility initially, but society would “settle” after a few decades.

“This is amplified by marriage sorting. That is the well-educated marrying one another and passing on their advantages to their children,” Low said.

A paper published last December by local think-tank Institute of Policy Studies, which demonstrated the sharpest social divisions were based on class, not race or religion, started the latest debate on the impact of inequality.

The report, co-authored by sociologist Tan, showed low interaction between students who attended elite and regular schools, and between Singaporeans living in private and public housing.

This was followed by a bestselling book by Nanyang Technological University sociologist Teo You Yenn titled This is What Inequality Looks Like, which told of the experiences of the low income group, and the systemic issues keeping them poor.

In early October, a six-minute clip on Facebook of the Regardless of Class documentary sparked feelings of discomfort, guilt and self-reflection among Singaporeans – possibly from realising “there may well be two Singapores in our midst”, said former nominated Member of Parliament Eugene Tan, a law don at Singapore Management University.

In it, six students from different education streams talked about their dreams and school experiences.

Some were aiming for an overseas degree and a minimum of A’s; others just wanted to pass their examinations.

When presenter Janil Puthucheary, a Cabinet member, mooted putting students of mixed abilities together in one classroom, a girl from the higher education stream said it was not viable, as “it might even increase the gap if these students feel like they can’t cope so they just give up completely”.

Puthucheary asked if the conversation was awkward.

One boy from the lower education stream said: “The way they speak and the way I speak (are) different, I feel like.

” Another student completed the sentence: “Like they are high class and we are not.”

Seetoh Huixia, a social worker for 13 years who is assistant director of AWWA Family Services, said she had seen this sort of low self esteem in the people she works with. “The sense of us versus them, the inferiority complex, that they’re not good enough,” she said.

The Straits Times opinion editor Chua Mui Hoong wrote: “It got me thinking; how did we become a society that looks down on people for the work they do or the grades they get? Are we all complicit in this? Can anything be done to turn our society inside out so that we are all less disdainful, more respectful, of one other?”

Academics felt the documentary was a good conversation starter, but urged Singaporeans to look at the underlying causes of this class divide.

Low said the documentary was problematic because “the root causes of economic inequality, an elitist education system and the government’s anti-welfarism are not interrogated, and that a complex issue (of structural inequality) is reduced to people not having enough empathy or being snobbish”.

“All this class consciousness and implicit bias is a function of our systems and policies,” he added.

Teo urged Singaporeans to look beyond attitudes and focus on the inequality that had led to the divide.

“We must not focus on perceptions – whether of ourselves or others – at the expense of real differences in daily struggles and well-being. The perceptions exist in response to those differences. Just as thinking about gravity differently would not stop a ball rolling downhill, pretending differences don’t exist isn’t going to magically make the differences disappear,” she said.

Sociologist Tan said structural changes through policies would be critical. “It can’t be just about telling people to be nice and respectful toward one another.”

Experts have in the last decade proposed ways in which Singapore can mitigate gnawing income inequality, ranging from policy changes in the areas of wages, taxes on wealth, social spending, housing and education.

The government has responded by increasing its social spending — supplementing the income of low-wage workers, introducing a universal health insurance scheme, increased personal income tax rates for high earners. It has also expanded its network of social service touchpoints and just in September tweaked the education system to reduce the emphasis on examinations.

But its social spending is still lower than Nordic countries and personal income taxes remain competitive to attract talent, leading developmental charity Oxfam and non-profit research group Development Finance International to this month call out the government for “harmful tax practices”, low public social spending, no equal pay or non-discrimination laws for women and lack of a minimum wage.

They ranked Singapore in the bottom 10 of 157 governments (at 149th place), ranked on how they were tackling the growing gap between rich and poor.

The government staunchly disagreed with the report, with Minister for Social and Family Development Desmond Lee saying Singapore’s outcomes in health care, education and housing were better than most countries despite spending less. The World Bank’s Human Capital Index, leaders noted, placed Singapore top for helping people realise their full potential.

One area experts agree on is that more tweaks are needed to the education system.

Singapore Management University’s Tan said apart from higher wealth taxes, “the education system needs to ensure not just equal opportunities but endeavour to provide for equal access to opportunities. There is a world of difference between the two. We may have focused on the former but not enough on the latter”.

Low said the education system needed to be “truly egalitarian”.

He suggested the state funds a national early childhood education system for children aged four onwards to remove segmentation from the get-go, to remove the national exam sat by 12-year-olds in Singapore and have schools run for the entire day so parents do not fill their children’s afternoons with tuition.

Theseira had a more novel solution: affirmative action that accords favours to the disadvantaged.

“It basically says that somebody from a disadvantaged background who achieves the same thing as somebody from a privileged background should be given much more credit because that is actually a much bigger achievement given the starting point,” he said.

“Are we willing to contemplate that? I don’t think we are at the moment but it’s a very obvious policy that addresses this problem with the definition of meritocracy.”

There must be a sense that a class divide is harmful for everyone, especially among those who have thrived under the current system, Eugene Tan said.

“A class divide could threaten Singapore’s existence because it would pit Singaporeans against Singaporeans. The divide would render Singapore to be rife with populism and to be consumed by sub-national identities. The class divide is also likely to reinforce existing cleavages based on race, religion and language.” — South China Morning Post by kok xing hui

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Saturday 27 October 2018

China leads the way as world's billionaires get even richer

The United States created 53 new billionaires in 2017, down from 87 five years ago
China produced around two new billionaires a week last year as the fortunes of the world's ultra-rich soared by a record amount, a report said Friday.

Read more at: https://phys.org/news/2018-10-china-world-billionaires-richer.html#jCp
China produced two new billionaires a week last year as the fortunes of the world’s ultra-rich soared by a record amount - AFP

 China produced around two new billionaires a week last year as the fortunes of the world's ultra-rich soared by a record amount, Swiss banking giant UBS and auditors PwC said.

Billionaires' wealth enjoyed its "greatest-ever" increase in 2017, rising 19 percent to $8.9 trillion ($7.8 billion euros) shared among 2,158 individuals, said the report by Swiss banking giant UBS and auditors PwC.

But Chinese billionaires expanded their wealth at nearly double that pace, growing by 39 percent to $1.12 trillion.

"Over the last decade, Chinese billionaires have created some of the world's largest and most successful companies, raised living standards," said Josef Stadler, head of Ultra High Net Worth at UBS Global Wealth Management.

"But this is just the beginning. China's vast population, technology innovation and productivity growth combined with government support, are providing unprecedented opportunities for individuals not only to build businesses but also to change people's lives for the better."

The report said China minted two new billionaires a week in 2017, among more than three a week created in Asia.

In the Americas region, the wealth of billionaires increased at a slower rate of 12 percent, to $3.6 trillion, with the United States creating 53 new billionaires in 2017 compared to 87 five years ago.

Currency appreciation saw European billionaires' wealth grow 19 percent although the number of billionaires rose by just 4.0 percent to 414.

Wealth transition from just five families accounted for 30 percent of the continent's wealth expansion, the study said.

It warned of lower economic growth in the United States and China if the trade war between the two countries escalates.

"US and Asia ex-Japan equities could fall by 20 percent from their mid-summer 2018 levels."

Asia challenging US dominance

For China's young billionaires "the country's fundamentals of a huge population and rising technology will continue to offer fertile conditions for entrepreneurs to grow their businesses," the study said.

It there were only 16 Chinese billionaires as recently as 2006.

"Today, only 30 years after the country's government first allowed private enterprise, they number 373 – nearly one in five of the global total."

It said 97 percent of them are self-made, many of them in sectors such as technology and retail.

Billionaires from Asia, especially in the Chinese city of Shenzhen, are now challenging the traditional dominance of Americans as technology entrepreneurs.

"In 2017, they equalled America's level of venture capital funding for start-ups, registered four times as many Artificial-Intelligence-related patents and three times as many blockchain and crypto-related patents as their US counterparts."

Ravi Raju, head of Asia Pacific Ultra High Net Worth at UBS Global Wealth Management, said Asia's billionaires "are young and relentless. They are constantly transforming their companies, developing new business models and shifting rapidly into new sectors."

The report said that globally, self-made billionaires have driven 80 percent of the 40 main breakthrough innovations over the last 40 years.

UP AND OUT OF POVERTY - Xi Jinping


https://youtu.be/SYWz2bwCUEE

Related: 

© 2018 AFP /Phys.org

Asia's billionaires see fastest wealth growth: report  September 17, 2014 

 

 Asia's billionaires see fastest wealth growth: report

 

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Asia's billionaires led by Chinese tycoons enjoyed the fastest increase in their wealth this year compared to their peers in the rest of the world, a report said Wednesday.


Read more at: https://phys.org/news/2018-10-china-world-billionaires-richer.html#jCp

Asia's billionaires see fastest wealth growth: report

September 17, 2014
Asia's billionaires led by Chinese tycoons enjoyed the fastest increase in their wealth this year compared to their peers in the rest of the world, a report said Wednesday.


Read more at: https://phys.org/news/2018-10-china-world-billionaires-richer.html#jCp

Monday 8 October 2018

Unknown Chinese startup creates the world's most valuable Bytedance

Independent moves: Bytedance has become among the most successful major Chinese tech companies in creating an international base without the backing of giants Alibaba and Tencent. — Reuters

https://youtu.be/nhrmuyEsqrk
https://youtu.be/VKD3jt0KvhQ
Building a vision: Over five years, Zhang has grown the app into one of the most popular news services anywhere, with 120 million daily users. — Bloomberg

Said to be valued at over $75 billion in new round of funding.


Bloomberg reports that when Zhang Yiming first shopped the idea of a news aggregation app powered by artificial intelligence six years ago, investors including Sequoia Capital were skeptical.

Back then, the question was how a 29-year-old locally trained software engineer could outsmart the numerous news portals operated by the likes of social media behemoth Tencent Holdings. and extract profit where even Google had failed.

Zhang, now 35, proved them wrong. Today his company, Bytedance Ltd., is on its way to a more than $75 billion valuation -- a price tag that surpasses Uber Technologies. to top the world, according to CB Insights. The latest in a long line of investors who’ve come around is Softbank Group., which is said to be planning to invest about $1.5 billion. Bytedance now counts KKR & Co., General Atlantic and even Sequoia as backers. Much of its lofty valuation stems from the creation of an internet experience that’s a cross between Google and Facebook.

35-Year-Old Unknown Creates the World's Most Valuable Startup

News aggregation app evolves into a multi-faceted media goliath


WHEN Zhang Yiming first shopped the idea of a news aggregation app powered by artificial intelligence six years ago, investors including Sequoia Capital were sceptical.

Back then, the question was how a 29-year-old locally trained software engineer could outsmart the numerous news portals operated by the likes of social media behemoth Tencent Holdings Ltd and extract profit where even Google had failed.

Zhang, now 35, proved them wrong.

Today his company, Bytedance Ltd, is on its way to a more than US$75bil valuation – a price tag that surpasses Uber Technologies Inc to top the world, according to CB Insights.

The latest in a long line of investors who have come around is Softbank Group Corp, which is said to be planning to invest about US$1.5bil. Bytedance now counts KKR & Co, General Atlantic and even Sequoia as backers.

Much of its lofty valuation stems from the creation of an internet experience that’s a cross between Google and Facebook.

“The most important thing is that we are not a news business. We are more like a search business or a social media platform,” Zhang said in a 2017 interview, adding that he employs no editors or reporters.

“We are doing very innovative work. We are not a copycat of a US company, both in product and technology.”

What’s remarkable is Zhang was able to do it all without taking money from the twin suns of China’s internet: Alibaba Group Holding Ltd and Tencent.

It’s the first startup to emerge from the dwindling cohort of mobile players that hasn’t sought protection or funds from either of the two. In fact, it has often locked horns with them, in court and elsewhere. And it’s arguably more successful at engaging youthful audiences abroad.

The story of how Bytedance became a goliath begins with news site Jinri Toutiao but is tied more closely to a series of smart acquisitions and strategic expansions that propelled the company into mobile video and even beyond China. By nurturing a raft of successful apps, it has gathered a force of hundreds of millions of users and now poses a threat to China’s largest Internet operators.

The company has evolved into a multi-faceted empire spanning video service Tik Tok – known as Douyin locally – and a plethora of platforms for everything from jokes to celebrity gossip.

But as with Facebook at the same stage of its life, Bytedance now faces questions over when or even how it will start making a profit.

“The predominant issue in China’s internet is that the growth in users and the time each user spends online has slowed dramatically.

“It is becoming a zero-sum game, and costs for acquiring users and winning their time are increasing,” said Jerry Liu, an analyst with UBS.

“What Bytedance has created is a group of apps that are very good at attracting users and retaining their time, in part, leveraging the traffic from Jinri Toutiao.”

Despite its seeming isolation, it’s become the most successful major Chinese tech company in creating an international base, venturing via apps like Tik Tok into the US, South-East Asia and Japan.

Even Tencent’s WeChat had to pump the brakes on its own overseas initiative four years ago.

What Zhang perceived in 2012 was that Chinese mobile users struggled to find information they cared about on many apps.

That’s partly because of the country’s draconian screening of information. Zhang thought he could do better than incumbents such as Baidu, which enjoyed a near-monopoly on search.

The latter conflated advertising with search results, a botch that would later haunt the company via a series of medical scandals.

There was little Toutiao could do about censorship – in fact, the company’s been repeatedly excoriated by authorities for failing to filter content and been forced to clean up its services with alarming regularity.

But Zhang held fast to his early vision of delivering content that mattered to users through AI. The closest American equivalent was Facebook’s news feed.

After falling flat with the bulk of China’s venture capital stalwarts, Zhang eventually secured investment from Susquehanna International Group.

It began offering the news app in August 2012. The platform studied what users read and searched for, then referred information and articles based on those habits. The more people used it, the better the experience, and the longer people stayed.

By mid-2014, daily active users had climbed to more than 13 million.

Sequoia finally came to the table, leading a funding round of US$100mil.

“We push information, not by queries, by news recommendations,” Zhang said in the interview last year.

But it was video that really propelled Bytedance into the big leagues.

Streaming services have always been popular in China. Even during the desktop era, companies like YY Inc championed a model where people sang and danced in virtual showrooms to win online gifts from fans. Later, outfits like Kuaishou fuelled that penchant for zany showmanship.

Bytedance saw an opportunity, but made its videos much shorter: 15 seconds, to be precise.

Around September 2016, it quietly launched Douyin. The app let users shoot and edit footage, add filters and share them across platforms like the Twitter-like Weibo or WeChat.

That format appealed to shorter millennial attention spans and became an instant hit, so much so that WeChat later blocked direct access to the app.

A year after, Bytedance acquired Musical.ly for US$800mil. It saw synergy between the buzzy teen US social video app created by Chinese co-founders and Tik Tok, and is now in the process of combining them. Tik Tok and Douyin had a combined 500 million users as of July.

The challenge now is in translating buzz and viewership into dollars. The company is expanding its ad sales operations, particularly for Toutiao.

Several media buying agencies said its massive reach and the attention it draws is a natural lure for marketers. Many said Bytedance is even pulling spending away from Tencent.

Bytedance, which previously cut a deal with Cheetah Mobile to sell ad space, has brought most of its ad sales in-house, said Kenneth Tan, the chief digital officer for Mindshare China, an agency.

“From a pricing perspective, they are expensive for what they are. They definitely charge a premium,” Tan said. “But that has not been an inhibitor for the large brands.”

There’s a big caveat, however. Brands remain cautious about Bytedance’s regulatory issues, particularly given Beijing’s historic unpredictability around censorship.

This year, it had to shut down a popular joke-sharing app in April just as it appeared to take off. It also suspended Douyin and its bread-and-butter Toutiao around the same time.

That’s “a potential risk to brand collaboration,” said Sherry Pan, general manager for China at the agency Magna Global. — Bloomberg

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