Baidu Inc – Page 2

HKEX’s new dual counter scheme ‘solidifies’ Hong Kong’s role as yuan trading hub, CEO says

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HONG KONG, CHINA – JUNE 05: A pedestrian walks by an electronic screen displaying the numbers for the Hang Seng Index on June 5, 2023 in Hong Kong, China. (Photo by Chen Yongnuo/China News Service/VCG via Getty Images)

China News Service | China News Service | Getty Images

Investors will now be able to trade selected Hong Kong stocks in both the Hong Kong dollar and Chinese yuan in the so-called dual counter scheme that launched Monday.

The newly launched “HKD-RMB Dual Counter Model” will see an initial 24 companies start offering yuan counters to allow investors in Hong Kong to trade in the yuan, in addition to the Hong Kong currency. Companies on the list include tech heavyweights like Tencent, Alibaba and Baidu.

The dual counter model covers securities listed in both Hong Kong dollar and renminbi counters only. The Hong Kong Exchange said all shares of the same securities in the two different trading counters will be “fully interchangeable between counters.”

In an exclusive interview on CNBC’s “Squawk Box Asia,” Hong Kong Exchanges and Clearing CEO Nicolas Aguzin said the move was aimed at giving investors more options for investments, as well as more diversification possibilities.

“This program is aimed at number one, making sure that we give more options to investors. Number two, that we continue helping on the internationalization of the renminbi.” Thirdly, he said it “solidifies” Hong Kong’s role as a yuan trading hub.

The HKEX CEO noted that the initial batch of 24 companies make up about 40% of the average daily trading volume in the Hong Kong.

“We would expect that to continue expanding,” he added. “And over time, I think a great majority of the stocks in our markets will be participating in this program.”

With trading volumes in Hong Kong at a four year low, Aguzin said he expects an increase in turnover from the new dual connect model, noting there are “a lot” of yuan deposits in Hong Kong. As such, “you’re tapping a liquidity pool that is in renminbi that will now be able to invest directly,” he pointed out.

The key objective is to simplify the southbound flow of investments from the mainland, Aguzin said.

Investments from the mainland are currently carried out via the Southbound Stock Connect, which allows mainland investors to purchase Hong Kong stocks in Hong Kong dollars.

Stock Connect is a mutual market access program that allows investors in mainland China to trade and settle shares in Hong Kong via exchanges and clearing house in their home market, and vice versa.

Not the first try

This is not the first time that such a scheme is being introduced in Hong Kong.

In 2012, the Hong Kong exchange launched a similar scheme called the “dual tranche, dual counter” model, which allowed the issuer to offer and list two tranches of shares in both the Hong Kong dollar and Chinese yuan.

As with today’s dual counter model, shares of both RMB tranche and the HKD tranche were of the same class, and shareholders under these two tranches are expected to be treated equally.

According to Bloomberg, that scheme failed to take off when only one company took it up.

The difference this time is that there is a “dual counter market maker program” — aimed at providing liquidity to the yuan counter and minimizing price discrepancies between the Hong Kong dollar and yuan counters.

Aguzin said there are currently nine of these market makers that have signed up, and he thinks this “should encourage a lot of activity and [make] sure that the markets are really stabilized in both markets.”

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June 18, 2023

Hong Kong stocks enter bear market territory as China reopening optimism continues to fade

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People wearing face masks crossing a street at Hong Kong’s Wan Chai district on Feb. 16, 2021.

Zhang Wei | China News Service | Getty Images

Hong Kong’s benchmark index entered bear market territory Wednesday on an intraday basis, erasing the rebound gains from China’s reopening.

The Hang Seng index hit a session low of 18,105.78. That’s 20.2% below its 52-week closing high of 22,688.9 reached on Jan. 27. A technical bear market is defined as when prices fall 20% below recent highs.

Hong Kong technology stocks were among the leading decliners for the overall index, including internet company NetEase and e-commerce platforms Meituan and JD.com. Alibaba shed nearly 3%, Baidu fell more than 4%, and Bilibili plunged by 6%.

The Hang Seng Tech index has already fallen by more than 25% from its January peak. That’s a stark contrast to the reopening optimism that had once driven Asia-Pacific’s benchmark MSCI Asia Pacific index to a bull market.

The Hang Seng China Enterprises index, which measures the performance of the 50 largest and most liquid mainland Chinese companies listed in Hong Kong, has also retreated by more than 21% from its January peak.

Analysts had initially expected China’s economy to recover faster and earlier than expected, but that view quickly faded after the country continued to deliver disappointing economic data.

The latest factory activity reading for China came in at 48.8, below the 50-mark that separates growth from contraction — and missing the 49.4 estimate from a Reuters poll.

We expect a 'modest' appreciation of the Chinese yuan after 3 months, Goldman Sachs says

Morgan Stanley analysts said in a May 17 report that a weak reading in that manufacturing measure “has been a solid precursor to policy easing.” Economists told CNBC that a disappointing rebound could lead to more government stimulus ahead.

“If growth does not accelerate sufficiently to narrow the output gap, social stability risk may rise and eventually trigger more meaningful stimulus,” Morgan Stanley analysts wrote in the note.

The National Bureau of Statistics noted the purchasing managers’ index for large manufacturers came in at 50, while that of smaller manufacturers was lower. The index for services activity remained in expansionary territory at 54.5, but marked a second-straight month of decline.

Demand a major concern

Citi economists wrote in a Wednesday note that the latest economic data missing expectations by a large margin is seen as “signs of fatigue with the initial reopening impulse peaking.”

“Insufficient demand could be the major concern now, and there are both cyclical and structural causes for it,” they wrote, adding the “initial boost to the services sector from reopening could be fading.”

Citi economists also expect the People’s Bank of China to cut its medium-term lending facility rates by 20 basis points and its reserve requirement ratio by 50 basis points by the end of the year.

“We reckon that the Chinese economy could be on the verge of a self-fulfilling confidence trap and believe decisive policy actions are needed,” they wrote.

“There could be limited room for fiscal easing from the budget and we expect structural easing efforts with more efforts from the central government and quasi-fiscal tools via policy banks,” they wrote.

– CNBC’s Evelyn Cheng contributed to this report

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May 30, 2023

Consumers are starting to fire up China’s pandemic-battered economy, two ETF experts find

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China’s pandemic-battered economy is starting to see consumers open their wallets wider, according to KraneShares’ Brendan Ahern.

“We’re seeing the incremental rebound from the Chinese consumer,” the firm’s chief investment officer told “ETF Edge” this week. “[But] it’s not like turning on a light switch.”

The National Bureau of Statistics of China reports retail sales have been increasing since last November.

Ahern, who’s involved with the firm’s China-focused ETFs, expects quarterly earnings for Chinese companies to improve with each consecutive quarter — a forecast that may already be unfolding.

Tech giants Baidu and Tencent beat revenue expectations for the fiscal first quarter of 2023. Alibaba, on the other hand, missed revenue estimates.

“We’re actually hearing that for many of the companies … in the management calls, they’re speaking to how Q2 already is outpacing Q1, which outpaced Q4 of last year,” Ahern said.

China’s reopening is also anticipated to have a positive impact on the airline industry.

Singapore Airlines, Japan’s All Nippon Airways and Japan Airlines all noted demand from China as a factor in future earnings while reporting net profits earlier this month for the financial year ended March 2023.

GraniteShares’ Will Rhind sees a similar growth trajectory.

“Domestic travel [is] rebounding … but we’ve yet to see that from the international sector,” the ETF provider’s CEO said. “It will come, but maybe just not yet.”

Rhind told CNBC in a special interview later in the week that international travel from China could start to rebound this summer following a sluggish start.

His forecast comes as a government-backed epidemiologist said the country’s new Covid wave could infect 65 million a week by the end of next month.

Rhind believes the recent Covid surge won’t affect the reopening’s trajectory, adding past lockdowns seen across China are “very, very much unlikely to be repeated.”

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May 27, 2023

LinkedIn lays off 716 employees, kills China jobs app

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Aytac Unal | Anadolu Agency | Getty Images

LinkedIn, the popular business social networking platform owned by Microsoft, will discontinue its China-specific jobs app InCareer and lay off 716 employees worldwide, the company said in a message to employees.

The move, announced Monday, will impact around 3.5% of LinkedIn’s approximately 19,000 employees worldwide. LinkedIn launched InCareer in Dec. 2021 after sunsetting its localized LinkedIn product in China.

“Though InCareer experienced some success in the past year thanks to our strong China-based team, it also encountered fierce competition and a challenging macroeconomic climate,” LinkedIn CEO Ryan Roslansky said in the message.

Shares of parent company Microsoft were largely flat in pre-market trading Tuesday morning. In the third quarter of 2023, LinkedIn revenue grew 8% year-over-year to $3.7 billion, according to Microsoft’s earnings report and quarterly SEC filing.

InCareer will delete all user data by Aug. 9, according to a LinkedIn help page.

LinkedIn will continue to operate other businesses in China, including its LinkedIn Learning product. But Roslansky signaled that the company would continue to “manage expenses” in the year ahead, suggesting that further cost cuts or layoffs could be on the table.

China is a fertile market for U.S.-based tech companies, which often jostle with homegrown competitors to capture market share. The total number of InCareer and LinkedIn users in China was over 57 million, according to an InCareer page. By comparison, domestic competitor Zhaopin claimed over 320 million professional users and corporate users ranging from Baidu to Chinese government agencies.

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May 9, 2023

Alibaba shares soar 15% in Hong Kong on news of major overhaul

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Signage at the Alibaba Group Holding Ltd. offices in Beijing, China, on Tuesday, Jan. 17, 2023.

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Hong Kong-listed shares of Alibaba surged 15% at the open on Wednesday after the company announced a significant overhaul to split the tech giant into six business groups.

On Wall Street overnight, Alibaba stocks soared to close 14.26% higher. They were 0.71% higher in after-hours trading.

The decision to split into different units means each will be managed by its own leadership and executive board, and can pursue independent fundraising and IPOs when they’re ready.

The company said the move aims to “unlock shareholder value.”

The six business groups are:

Cloud Intelligence Group: includes company’s cloud and artificial intelligence activities;
Taobao Tmall Commerce Group: online shopping platforms including Taobao and Tmall;
Local Services Group: covers Alibaba’s food delivery service Ele.me as well as its mapping;
Cainiao Smart Logistics: houses Alibaba’s logistics service;
Global Digital Commerce Group: includes Alibaba’s international e-commerce businesses including AliExpress and Lazada;
Digital Media and Entertainment Group: includes Alibaba’s streaming and movie business.

The overhaul of the Chinese technology giant comes at the back of the company facing continued struggles with growth over the past few quarters – the company erased roughly $600 billion from its peak seen in October 2020 as it continued to grapple with the Chinese government’s crackdown on technology companies.

The stock moves are more reflective of a sense of relief, rather than investors’ hopes in the business, value investor and Warren Buffett disciple Guy Spier told CNBC’s Tanvir Gill.

“The rally in the shares is not so much because the market expects greater profitability, rather than relief that tensions with the regulator seem to have been resolved,” Spier said, adding that the company will face less pressure going forward.

He added that Chinese consumers – not investors – would be the beneficiary of Alibaba’s overhaul.

“This sets the stage for a more innovative Chinese tech sector and far more competition – so very good for Chinese consumers,” he said, adding that it “reduces concentration and the power of one business within China – which was making Chinese regulators uncomfortable.”

‘Utilized by others’

Tech stocks in Hong Kong climbed in morning trade: Shares of Tencent rose 3%, JD.com gained nearly 5%, and Baidu rose more than 3%. The Hang Seng Tech index soared 3.3% in its first hour of trade, leading gains in the Asia-Pacific region.

The moves seen in the stock prices of Alibaba’s peers on Wall Street indicated that other Chinese technology companies could turn to similar measures for their business.

“I think investors are saying what we saw in Alibaba, really the leader in China tech, that their plans might be utilized by others,” said Brendan Ahern, CIO of KraneShares, pointing to the ADR moves seen in Tencent, JD.com, and Baidu.

He noted the company’s announcement showed that Alibaba founder Jack Ma, who was recently spotted in China after spending months abroad, was involved in the process.

“It’s very clear he played a role in this new structure that is really around what the company said in the press release, it’s about unleashing the shareholder value,” said Ahern.

– CNBC’s Arjun Kharpal contributed to this report.

Correction: This story has been updated to reflect that Alibaba shares in Hong Kong surged on Wednesday.

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March 28, 2023

Time to buy the tech rally? Hedge fund manager Dan Niles and others reveal their top picks

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March 19, 2023

Baidu stock rebounds after falling sharply in wake of ChatGPT-style bot demo | CNN Business

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Hong Kong
CNN
—

Shares in Chinese search giant Baidu rebounded sharply a day after it unveiled ERNIE Bot, its answer to the ChatGPT craze.

Its stock soared 14.3% on Friday in Hong Kong, making it the biggest winner in the Hang Seng Index

(HSI). They also gained 3.8% in New York during US trade Thursday.

A day earlier, Baidu

(BIDU) was the biggest loser of the same index. Its Hong Kong shares fell 6.4% after a public demonstration of its bot failed to impress investors. Since February, more than 650 companies had joined the ERNIE ecosystem, CEO Robin Li said during the presentation.

The reversal came after the company said more than 30,000 businesses had signed up to test out its chatbot service within two hours of its demonstration.

“The high degree of enterprise interest is positive, and we expect Baidu to continue to capture China’s enterprise demand for generative AI,” Esme Pau, Macquarie’s head of China and Hong Kong internet and digital assets, told CNN.

She said the company’s shares were bouncing back Friday as some users, including analysts, shared positive feedback of their own experiences trying out ERNIE, which suggested the bot had more advanced capabilities.

During the presentation, Baidu showed how its chatbot could generate a company newsletter, come up with a corporate slogan and solve a math riddle.

But its stock slumped on Thursday because the demo was “pre-recorded, and not live, which makes investors skeptical about the robustness of the ERNIE Bot,” according to Pau.

Baidu’s demonstration also came just days after the launch of GPT-4, which “raised the bar for ERNIE,” she added.

GPT-4 is the latest version of the artificial intelligence technology behind ChatGPT. The service has impressed users this week with its ability to simplify coding, rapidly create a website from a simple sketch and pass exams with high marks.

Pau noted that Baidu’s shares were already “down modestly” before showing off its software on Thursday, highlighting pressure from investors who had raised expectations following the GPT-4 launch.

“ERNIE also does not have the [same] multilingual capability as GPT-4, and has yet to improve for English queries,” she said. “Also, the ERNIE launch did not provide sufficient quantifiable metrics compared to the GPT-4 launch earlier this week.”

Like ChatGPT, ERNIE is based on a language model, which is trained on vast troves of data online in order to generate compelling responses to user prompts.

Li said Baidu’s expectations for ERNIE were “close to ChatGPT, or even GPT-4.”

But he acknowledged the software was “not perfect yet,” adding it was being launched first to enterprise users. The service is not yet available to the public.

Baidu announced its chatbot last month. Some critics say the service will add fuel to an existing US-China rivalry in emerging technologies.

Li tried to shake off that comparison during the launch, saying the bot “is not a tool for the confrontation between China and the United States in science and technology, but a product of generations of Baidu technicians chasing the dream of changing the world with technology.”

“It is a brand new platform for us to serve hundreds of millions of users and empower thousands of industries,” he said.

Baidu says its service stands out because of its advanced grasp of Chinese queries, as well as its ability to generate different types of responses.

“ERNIE Bot can produce text, images, audio and video given a text prompt, and is even capable of delivering voice in several local dialects such as the Sichuan dialect,” the company said in a statement.

By comparison, GPT-4 is also able to analyze photos, but currently only generates text responses, according to its developer, OpenAI.

Baidu isn’t the only Chinese firm working on such technology. Last month, Alibaba

(BABA) announced plans to launch its own ChatGPT-style tool, adding to the list of tech giants jumping on the chatbot bandwagon.

So far, Baidu has a first mover advantage in the space in China, according to analysts.

“Our view is ERNIE is three to six months ahead of its potential contenders,” said Pau.

— CNN’s Mengchen Zhang contributed to this report.

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March 16, 2023

China tech companies are closely watching ChatGPT’s A.I. skills. Here’s what they’re doing about it

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A display at the World Artificial Intelligence Conference (WAIC) in Shanghai, China, on Friday, Sept. 2, 2022.

Bloomberg | Bloomberg | Getty Images

BEIJING — The business story of ChatGPT right now is more about what isn’t known.

Big tech companies in the U.S. and China rushed this month to announce they are working on similar AI tools. Their announcements often referenced Microsoft-backed ChatGPT, while disclosing few details on what they themselves were working on.

The artificial intelligence-powered chatbot ChatGPT has taken the tech world by storm in the last few months with its ability to generate everything from poems to business strategies in a human-like conversation.

Still, analysts say the tech is transformative, something that’s also been said about blockchain and the metaverse.

Competitive landscape

Here’s what companies — including those in China — are doing in this specialized area of AI:

U.S. startup OpenAI raced to beat rivals by launching ChatGPT in November, according to The New York Times, citing sources. The public interface skyrocketed in popularity for everything from homework help to strategy development.

OpenAI did not respond to a request for comment.

ChatGPT for business software

Database software startup PingCap already has a ChatGPT-based product on the market. The company has offices in Beijing and San Mateo, California.

PingCap launched “Chat2Query” for customers outside China in January that uses a publicly available application programming interface from OpenAI.

The product lets clients analyze in seconds their companies’ operating data — such as best-selling car models — without needing to know a computer programming language, said Liu Song, vice president of PingCap. He said Chat2Query is free for clients processing up to 5 gigabytes of data.

“We think the revolution may not be in AI search but in every business,” he said in Mandarin, translated by CNBC. However, he noted that those data need to be organized in a standardized way.

We think the revolution may not be in AI search but in every business

Liu Song

PingCap, vice president

Baidu, the Chinese search engine and tech giant, said Wednesday its AI chatbot project will be embedded into search first, and opened to the public in March.

The product is named “Ernie bot” in English or “Wenxin Yiyan” in Chinese, the company said previously.

While little is known about Ernie bot’s capabilities — and how they compare with ChatGPT’s — Baidu-backed video streaming platform iQiyi has announced plans for connecting to the bot for search and AI-generated content. Baidu-backed electric car startup Jidu — which hasn’t started delivering cars yet — also said it plans to incorporate Ernie bot.

Alibaba is scheduled to release quarterly earnings on Thursday evening. The Chinese e-commerce and cloud giant said it is internally testing ChatGPT-style technology, and did not provide a timeline for launch. However, Alibaba said it has been working on related AI tech since 2017.

Chinese e-commerce rival JD.com did not have a launch date either, but said its “ChatJD” will focus on retail and finance. It will assist with tasks such as generating product summaries on shopping sites and financial analysis, the company said.

Tencent, which operates the ubiquitous Chinese messaging app WeChat, said in a statement it continues to research natural language processing. That’s the field within artificial intelligence on which ChatGPT is based.

While ChatGPT this month became a trendy topic in China, even for state media, analysts note the country’s censorship and data regulations may affect how similar tech develops in the country. Beijing has emphasized building up its own technological abilities.

Nikkei Asia on Wednesday reported, citing sources, that regulators told Tencent and Alibaba-affiliate Ant Group not to offer access to ChatGPT services on their platforms, either directly or via third parties.

The report did not specify which regulators. China’s cybersecurity regulator, Tencent and Ant did not immediately respond to requests for comment.

In terms of technical ability, however, the U.S. is only months — not years — ahead of China in that AI research, a Microsoft executive told journalists this month. ChatGPT isn’t available in China, although Microsoft operates in the country.

The executive said that state-backed Beijing Academy of Artificial Intelligence is one of three global leaders in artificial intelligence research, along with Google’s DeepMind and Microsoft’s partnership with OpenAI.

A.I. creative content

Kunlun Tech expects to release an open source Chinese version of ChatGPT, as early as the middle of this year, its president Han Fang told CNBC last week. Open source software is available to the public and allows anyone to see, change or distribute the code.

The company, which generates most of its revenue outside China, previously said its niche web browser Opera is planning to incorporate ChatGPT into its products, although it’s unclear when or with what functions.

Kunlun Tech is already working in the field of AI-generated content, such as music.

Fang said his commercialization plan is to first develop those AI tools. Creators can then use the tools to make their own work and publish them on designated platforms for public viewing, following which the company can then sell ads, he said. He expects to launch the platforms later this year.

Transformative potential

Fang said he was directly inspired by OpenAI’s early version of ChatGPT tech in 2020.

“We all talk about the metaverse, but who is in it?” he said in Mandarin, translated by CNBC. “It only changed our news. It didn’t change our lives.”

In contrast, he said generative AI tech can immediately provide value since it operates where users are already producing and consuming content. Generative AI can also lower production costs, allowing animators and speakers of minority languages to easily create their own content, Fang said.

The implications for jobs and industries remain significant.

The arrival of AI such as ChatGPT means many “cognitive tasks” look easier to automate than manual work such as in factories — a surprise to many economists, said Anton Korinek, professor at the Department of Economics and Darden School of Business, University of Virginia.

“The impressive but also little bit scary part is that the power of these systems has been progressing steadily over the past couple of years,” he said, adding that he expects more powerful AI tech this year alone.

“That will really imply that these models will have a revolutionary impact on our economy, on productivity, on labor markets and ultimately on society in general.”

— CNBC’s Arjun Kharpal and Lauren Feiner contributed to this report.

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February 22, 2023

Baidu to implement ChatGPT-like Ernie Bot chatbot from March

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HONG KONG (AP) — Baidu Inc., one of China’s biggest search and artificial intelligence firms, said Wednesday it plans to implement its artificial intelligence chatbot Ernie into its search services from March.

Baidu, which is known for its search engine and autonomous driving technology, leads China’s efforts to create an equivalent of OpenAI’s ChatGPT chatbot. It said earlier this month that it will complete internal testing of Ernie Bot in March before making the service public.

In an internal memo, Baidu CEO Robin Li said that Ernie Bot will be integrated across all of Baidu’s operations, including its search and cloud services. Baidu also plans to integrate Ernie into its smart car operating system and smart speaker.

The company’s stock price in New York jumped nearly 7% in pre-market trading Wednesday to more than $150 a share.

“AI technology has reached a tipping point and all industries will inevitably go through transformation,” Li said in the memo.

“Baidu stands as the best example of the long-term growth of China’s AI market and is advancing at the forefront of this new wave,” he said.

The company also announced a $5 billion share buyback on Wednesday.

Baidu reported revenues of 33.1 billion yuan ($4.8 billion) for the quarter that ended in December, about level with the same period of 2021.

Most of Baidu’s revenue comes from its online marketing services, which generated 18.1 billion yuan ($2.62 billion) in sales in the last quarter.

Its Apollo Go autonomous ride-hailing services provided 561,000 rides in the fourth quarter, up 162% from a year earlier.

After years of regulatory scrutiny following a crackdown on the technology sector and a sluggish economy battered by COVID-19, companies like Baidu look likely to invest more as China looks to the industry to revive the economy.

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February 22, 2023

Fed meeting minutes and retail earnings are in focus in the week ahead

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February 17, 2023

ChatGPT frenzy sweeps China as firms scramble for homegrown options

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Jakub Porzycki | Nurphoto | Getty Images

Microsoft-backed OpenAI has kept its hit ChatGPT app off-limits to users in China, but the app is attracting huge interest in the country, with firms rushing to integrate the technology into their products and launch rival solutions.

While residents in the country are unable to create OpenAI accounts to access the artificial intelligence-powered (AI) chatbot, virtual private networks and foreign phone numbers are helping some bypass those restrictions.

At the same time, the OpenAI models behind the ChatGPT programme, which can write essays, recipes and complex computer code, are relatively accessible in China and increasingly being incorporated into Chinese consumer technology applications from social networks to online shopping.

The tool’s surging popularity is rapidly raising awareness in China about how advanced U.S. AI is and, according to analysts, just how far behind tech firms in the world’s second-largest economy are as they scramble to catch up.

“There is huge excitement around ChatGPT. Unlike the metaverse which faces huge difficulty in finding real-life application, ChatGPT has suddenly helped us achieve human-computer interaction,” said Ding Daoshi, director of Beijing-based internet consultancy Sootoo. “The changes it will bring about are more immediate, more direct and way quicker.”

OpenAI or ChatGPT itself is not blocked by Chinese authorities but OpenAI does not allow users in mainland China, Hong Kong, Iran, Russia and parts of Africa to sign up.

OpenAI told Reuters it is working to make its services more widely available.

“While we would like to make our technology available everywhere, conditions in certain countries make it difficult or impossible for us to do so in a way that is consistent with our mission,” the San Francisco-based firm said in an emailed statement. “We are currently working to increase the number of locations where we can provide safe and beneficial access to our tools.”

In December, Tencent Holdings’ WeChat, China’s biggest messaging app, shut several ChatGPT-related programmes that had appeared on the network, according to local media reports, but they have continued to spring up.

Dozens of bots rigged to ChatGPT technology have emerged on WeChat, with hobbyists using it to make programmes or automated accounts that can interact with users. At least one account charges users a fee of 9.99 yuan ($1.47) to ask 20 questions.

Tencent did not respond to Reuters’ request for comments.

ChatGPT supports Chinese language interaction and is highly capable of conversing in Chinese, which has helped drive its unofficial adoption in the country.

Chinese firms also use proxy tools or existing partnerships with Microsoft, which is investing billions of dollars in its OpenAI, to access tools that allow them to embed AI technology into their products.

Shenzhen-based Proximai in December introduced a virtual character into its 3D game-like social app who used ChatGPT’s underlying tech to converse.

Beijing-based entertainment software company Kunlun Tech plans to incorporate ChatGPT in its web browser Opera.

SleekFlow, a Tiger Global-backed startup in Hong Kong, said it was integrating the AI into its customer relations messaging tools.

“We have clients all over the world,” Henson Tsai, SleekFlow’s founder said. “Among other things, ChatGPT does excellent translations, sometimes better than other solutions available on the market.”

Censorship

Reuters’ tests of ChatGPT indicate that the chatbot is not averse to questions that would be sensitive in mainland China. Asked for its thoughts on Chinese President Xi Jinping, for instance, it responded it does not have personal opinions and presented a range of views.

But some of its proxy bots on WeChat have blacklisted such terms, according to other Reuters checks, complying with China’s heavy censorship of its cyberspace. When asked the same question about Xi on one ChatGPT proxy bot, it responded by saying that the conversation violated rules.

To comply with Chinese rules, Proximai’s founder Will Duan said his platform would filter information presented to users during their interaction with ChatGPT.

Chinese regulators, which last year introduced rules to strengthen governance of “deepfake” technology, have not commented on ChatGPT, however, state media this week warned about stock market risks amid a frenzy over local ChatGPT-concept stocks.

The Cyberspace Administration of China, the internet regulator, did not respond to Reuters’ request for comment.

“With the regulations released last year, the Chinese government is saying: we already see this technology coming and we want to be ahead of the curve,” said Rogier Creemers, an assistant professor at Leiden University. “I fully expect the great majority of the AI-generated content to be non-political.”

Chinese rivals

Joining the buzz have been some of the country’s largest tech giants such as Baidu and Alibaba who gave updates this week on AI models they have been working on, prompting their shares to zoom.

Baidu said this week it would complete internal testing of its “Ernie Bot” in March, a big AI model the search firm has been working on since 2019.

On Wednesday, Alibaba said that its research institute Damo Academy was also testing a ChatGPT-style tool.

Duan, whose company has been using a Baidu AI chatbot named Plato for natural language processing, said ChatGPT was at least a generation more powerful than China’s current NLP solutions, though it was weaker in some areas, such as understanding conversation context.

Baidu did not reply to Reuters’ request for comments.

Access to OpenAI’s GPT-3, or Generative Pre-trained Transformer, was first launched in 2020, an update of which is the backbone of ChatGPT.

Duan said potential long-term compliance risks mean Chinese companies would most likely replace ChatGPT with a local alternative, if they could match the U.S.-developed product’s functionality.

“So we actually hope that there can be alternative solutions in China which we can directly use… it may handle Chinese even better, and it can also better comply with regulations,” he said.

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February 10, 2023

Chinese search engine giant Baidu announces ChatGPT-style AI bot | CNN Business

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Hong Kong
CNN
—

Chinese search engine giant Baidu says it will be launching its own ChatGPT-style service.

It will launch a new artificial intelligence chatbot called “Wenxin Yiyan” in Chinese, or “Ernie Bot” in English, a spokesperson told CNN on Tuesday.

Baidu

(BIDU) is currently testing the project internally and will likely roll out the service to users in March, the person said.

The company did not provide further details, such as how the tool would look or whether it would appear as a feature within its popular search engine.

Baidu’s AI investments can be seen as “both an offensive and defensive strategic move in China,” Daniel Ives, managing director of Wedbush Securities, told CNN. “Chinese Big Tech is battling in this AI race, with Baidu [being] a key player.”

The news follows Google’s announcement Monday that it would unveil a new chatbot tool dubbed “Bard” in an apparent bid to compete with the viral success of ChatGPT.

In a blog post, Google

(GOOGL) CEO Sundar Pichai said Bard was opened up to “trusted testers” starting Monday, with plans to make it available to the public “in the coming weeks.”

Like ChatGPT, which was released publicly in late November by AI research company OpenAI, Bard is built on a large language model.

These models are trained on vast troves of data online in order to generate compelling responses to user prompts.

In the two months since it launched, ChatGPT has been used to generate essays, stories and song lyrics, and to answer some questions one might previously have searched for on Google.

Microsoft

(MSFT), too, is investing billions of dollars in OpenAI. Details of the investment are set to be announced later on Tuesday, with the tie-up estimated to be in the $10 billion range, according to Ives.

The deal “is a game changer in our opinion for Nadella & Co as the ChatGPT bot is one of the most innovative AI technologies in the world today,” he wrote in a Monday note, referring to Microsoft CEO Satya Nadella.

— CNN’s Catherine Thorbecke and Juliana Liu contributed to this report.

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February 6, 2023

Optimism on Chinese stocks soars to five-year highs

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Trucks and passenger cars drive across the Sutong Bridge in the city of Suzhou near Shanghai on Jan. 27, 2023, during the Lunar New Year holiday.

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BEIJING — Money is flowing into mainland Chinese and Hong Kong stocks in ways not seen since 2018, according to research firm EPFR Global.

Active foreign fund managers put $1.39 billion into mainland Chinese stocks in the four weeks ended Jan. 25, EPFR data showed. Active fund inflows into Hong Kong stocks were even greater during that time, at $2.16 billion.

“Active managers have never been this positive toward China markets in the past five years,” said Steven Shen, manager of quantitative strategies at EPFR.

“In the very short term we should be expecting more inflows from the active managers,” he said, pointing to factors such as China’s reopening from zero-Covid. EPFR says it tracks fund flows across $46 trillion in assets worldwide.

Active money managers are more involved with picking portfolio investments, while passive money managers tend to follow stock indexes.

The Shanghai composite gained more than 5% in January, the most since a surge of nearly 9% in November, according to Wind Information. The Hang Seng Index climbed by more than 10% in January, a third-straight month of gains.

The money is coming in faster than it did in early 2022, Shen said. At the time, a few institutional investors had said it was time to buy Chinese stocks due to Beijing’s emphasis on stability in a politically important year.

Back then, local investors had been more cautious. The highly transmissible omicron variant and China’s zero-Covid policy subsequently locked down the city of Shanghai for two months, while constraining business activity in much of the country. In 2022, GDP grew by 3%, one of the slowest paces in decades.

China abruptly ended its increasingly stringent Covid controls in December. Tourism, including travel abroad, rebounded during the Lunar New Year in late January.

This year, local investor sentiment is also recovering.

“With the macro environment in China I think 2023 we’re going to see a lot more [mainland China] client money shifting back into the market, into the secondary market funds,” Lawrence Lok, chief financial officer of wealth management firm Hywin, said in early January. The secondary market refers to the public stock market.

Lok said those clients last year avoided taking risk due to the turbulent market. The Shanghai and Hong Kong stock indexes plunged more than 15% last year.

For Hywin’s clients with funds outside of China, Lok said they are looking for ways to invest in U.S.-listed Chinese companies or Hong Kong stocks, among other offshore funds.

Hywin had more than 40,000 active clients as of June 2022 and 4.5 billion yuan ($642.9 million) in assets under management.

Deeper concerns

However, Bernstein analysts cautioned Chinese stock gains might not run much further if U.S. active investors — who have sat out the rally — and local investors don’t buy in.

The “extreme” inflows of the past three months threaten whether the market rally can continue for the next three months, Bernstein analysts said in a Jan. 27 report. “We believe in the short term, investors need to be more selective while picking China exposure.”

Recent enthusiasm about Chinese stocks also follows a rocky two years in which the abrupt suspension of Ant Group’s IPO, a crackdown on tech and real estate businesses and stringent Covid controls weighed on sentiment.

Bruce Liu, CEO of Esoterica Capital, said in January that while he’s been talking with some affluent Chinese about global diversification since 2019, they didn’t really start to act until the second half of last year. His firm manages under $50 million in assets.

“What happened in the past two years, that left a scar on their mind,” Liu said. “It’s a matter of confidence. I don’t see that confidence coming back yet. At least the people I have been talking to.”

“This is a strategic decision from their perspective,” he said. “Maybe they have enough Chinese assets. It’s more important for them to diversify [globally] rather than take advantage of this current, ongoing coming back.”

Moving to China

The China reopening story isn’t just for capital. Now that the borders are open, some in the investing business are even physically coming into the country.

Taylor Ogan, CEO of Snow Bull Capital, moved with his team of three to Shenzhen, China, in January to open a research office.

“The more we looked at it, we need to be in China simply just for research,” Ogan said. He said many Chinese companies don’t have much English-language material even if they are listed in Hong Kong, and that some giant Chinese public companies told them they hadn’t had any foreign analysts visit them since the pandemic.

“We started seeing that as an opportunity.”

— CNBC’s Michael Bloom contributed to this report.

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February 5, 2023

Hong Kong stocks off to best start since 2018 on China recovery hopes

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Shoppers walk through a street market in Hong Kong, China, on Sunday, Jan. 30, 2022. Photographer: Chan Long Hei/Bloomberg via Getty Images

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Hong Kong stocks kicked off 2023 with the most gains they’ve seen in the first trading session of a year since 2018.

The Hang Seng index on Tuesday gained 1.84%, or 363.88 points — its biggest first-day gain since January 2018, when the index rose nearly 2%.

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That signaled an improved outlook as China continues to reopen despite a nationwide surge in Covid infections.

“While it is inevitable to see further surges and more widespread in inflection at the initial stage of opening, the outlook for the Chinese economy has brightened for 2023,” Redmond Wong, Saxo Capital Markets greater China market strategist, said in a note.

“In addition to the reopening, China has intensified its effort to support the distressed property sector and given property developers access to credits and equity financing which had been denied to them for the most part of 2022,” Wong wrote.

Property and technology stocks continued to lift the Hang Seng index, which rose more than 3% in Wednesday’s session. The index exceeded 20,600, the highest level it’s seen since July 29, according to Refinitiv data.

Chinese property developer stocks listed in the city rose: Country Garden jumped more than 7%, Longfor Group gained nearly 12% and Cifi Holdings Group jumped 13% on Wednesday.

The moves followed reports of Chinese officials planning to provide further policy support for ailing real estate developers.

Chinese tech giant Alibaba is one of our top picks this year, says asset management firm

Technology stocks also rallied, with shares of Alibaba rising 8% after Chinese regulators approved Ant Group‘s plan to more than double its registered capital, a sign of progress in resolving regulators’ concerns.

Electric vehicle maker Baidu rose more than 8%; Chinese video and gaming app Bilibili gained nearly 9%; Netease rose more than 5%; JD.com climbed 7%; and Tencent also rose around 4%.

The Hang Seng rally came after Chinese Finance Minister Liu Kun told Xinhua in an interview that there will be more fiscal policy support.

Shoppers purchase festive sweets ahead of Lunar New Year at a street stall in Hong Kong, China, on Sunday, Jan. 30, 2022. Photographer: Chan Long Hei/Bloomberg via Getty Images

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The government will work on expanding and improving the “effectiveness of the proactive fiscal policy to cope with multiple challenges ahead,” the minister was quoted as saying.

Chinese investment bank Guotai Junan Securities said the performance of Hong Kong stocks will affect the wider global market.

“The Hang Seng Index may lead other major global stock indices in 2023, with around 30% expected return,” analysts at the firm said in a Wednesday note.

“The index valuation may see further rerates, and we expect the HSI to recover to its previous level before Jun. 2022,” they said in the note.

Implications for U.S. Fed

China’s reopening is a positive sign for Asian stocks and global economic growth in 2023, but it carries also inflationary risks, thanks to China’s role in driving demand for the global commodities market, analysts at Raymond James said in a note.

Weaker growth in the Chinese economy will likely increase the chances of a more dovish Federal Reserve, while stronger growth will raise the possibility of a “stubbornly hawkish Fed,” equity strategist Tavis McCourt wrote.

“Volatility seems certain with equities finishing either modestly higher or modestly lower depending on the rate path,” McCourt said in the note.

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January 4, 2023

Companies can ‘hire’ a virtual person for about $14k a year in China

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Virtual singer Luo Tianyi performing with world renowned pianist Lang Lang in 2019 at the Mercedes-Benz Arena in Shanghai, China. Launched in 2012, Luo Tianyi has nearly 3 million fans and even performed at the Winter Olympics opening ceremony in Beijing this year.

Visual China Group | Getty Images

BEIJING — From customer service to the entertainment industry, businesses in China are paying big bucks for virtual employees.

Tech company Baidu said the number of virtual people projects it’s worked on for clients has doubled since last year, with a wide price range of as little as $2,800 to a whopping $14,300 per year.

Virtual people are a combination of animation, sound tech and machine learning that create digitized human beings who can sing and even interact on a livestream. While these digital beings have appeared on the fringes of the U.S. internet, they’ve been popping up more and more in China’s cyberspace.

Some buyers of virtual people include financial services companies, local tourism boards and state media, said Li Shiyan, who heads Baidu’s virtual people and robotics business.

As the tech improves, costs have dropped by about 80% since last year, he said. It costs about 100,000 yuan ($14,300) a year for a three-dimensional virtual person, and 20,000 yuan for a two-dimensional one.

Li expects the virtual person industry overall will keep growing by 50% annually through 2025.

Searching for scandal-free icons

From a business perspective, much of the focus is on how virtual people can generate content.

Brands in China are looking for alternative spokespeople after many celebrities recently ran into negative press about tax evasion or personal scandals, said Sirius Wang, chief product officer and head of marketplace Greater China at Kantar.

Dancers perform with virtual digital people at the Future Life Festival 2022 in Hangzhou, China, on Nov. 4, 2022.

Future Publishing | Future Publishing | Getty Images

At least 36% of consumers had watched a virtual influencer or digital celebrity perform in the last year, according to a survey published by Kantar this fall. Twenty-one percent had watched a virtual person host an event or broadcast the news, the report said.

Looking ahead to next year, 45% of advertisers said they might sponsor a virtual influencer’s performance or invite a virtual person to join a brand’s event, according to the Kantar report.

Growing development of virtual people

Many of China’s large tech companies have already been developing products in the virtual humans industry.

Video and game streaming app Bilibili was one of the earliest to take the concept of virtual people mainstream.

The company acquired the team behind virtual singer Luo Tianyi, whose image and sound are fully created by tech. This year, the developers focused on improving the texture of the virtual singer’s voice by using an artificial intelligence algorithm, according to Bilibili.

EU Privacy regulators recommend new data limitations for Meta

Launched in 2012, Luo Tianyi has nearly 3 million fans and even performed at the Winter Olympics opening ceremony in Beijing this year.

Bilibili also hosts many so-called virtual anchors, which are the direct avatars of people using special technology to reach their audience. The company said 230,000 virtual anchors started broadcasting on its platform since 2019, and the virtual anchors’ broadcasting time this year surged by about 200% from last year.

Tencent said in its latest earnings call that Tencent Cloud AI Digital Humans provide chatbots to sectors such as financial services and tourism for automated customer support. The company’s Next Studios also developed a virtual singer and virtual sign language interpreter.

Far smaller companies are also getting into the industry.

Startup Well-Link Technologies — whose cloud rendering tech support for Chinese video game developer miHoYo brought it success in the gaming industry — announced this year it has developed yet another model of a virtual person in a joint venture with Haixi Media.

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January 2, 2023

Investments are set to flow back into China as tech giants avoid U.S. delisting, government pledges policy support, says investment manager

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Chinese e-commerce giant Alibaba was one of the 100 over companies that had faced the risk of delisting in the U.S. in 2024 if it did not hand over the audits of their financial statements.

Budrul Chukrut | Sopa Images | Lightrocket | Getty Images

Investors could regain the confidence to put their money in Chinese tech stocks as these companies avoid delisting from U.S. stock exchanges and the Chinese government pledges policy support, according to one investment manager.

Last week, U.S. accounting watchdog the Public Company Accounting Oversight Board said it gained full access to inspect and investigate Chinese companies for the first time, after China finally granted the U.S. access in August.

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More than 100 Chinese tech companies such as Alibaba, Baidu and JD.com had faced the risk of delisting in the U.S. in 2024 if their audit information was not made available to PCAOB inspectors.

Investors often grapple with a lack of transparency into Chinese stocks.

“It will allow institutional investors to come back. Professional investors were very scared about this delisting risk which was why they have stayed on the sidelines,” Brendan Ahern, chief investment officer at U.S.-based investment manager KraneShares, told CNBC’s “Squawk Box Asia” on Wednesday.

China tech: Expect to see more policies geared toward raising domestic consumption, KraneShares says

As of Sept. 30, there were 262 Chinese companies listed on U.S. exchanges with a total market capitalization of $775 billion, according to the United States-China Economic and Security Review Commission.

“With that risk going away based on the PCAOB announcement, you are going to see investment dollars flow back into these names,” said Ahern.

“These internet giants are really where investors want to invest when it comes to China,” said Ahern.

But he also caveated that it is still “early days, weeks, months to see that capital return back into the space.”

Tim Draper predicts bitcoin will reach $250,000 next year despite FTX collapse: ‘The dam is about to break’

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Tim Draper, founder of Draper Associates, onstage at the Web Summit 2022 tech conference.

Ben McShane | Sportsfile via Getty Images

Venture capitalist Tim Draper thinks bitcoin will hit $250,000 a coin by the middle of 2023, even after a bruising year for the cryptocurrency marked by industry failures and sinking prices.

Draper previously predicted that bitcoin would top $250,000 by the end of 2022, but in early November, at the Web Summit tech conference in Lisbon, he said it would take until June 2023 for this to materialize.

He reaffirmed this position Saturday when asked how he felt about his price call following the collapse of FTX.

“I have extended my prediction by six months. $250k is still my number,” Draper told CNBC via email.

Bitcoin would need to rally nearly 1,400% from its current price of around $17,000 for Draper’s prediction to come true. The cryptocurrency has plunged over 60% since the start of the year.

Digital currencies are in the doldrums as tighter monetary policy from the Fed and a chain reaction of bankruptcies at major industry firms including Terra, Celsius and FTX have put intense pressure on prices.

FTX’s demise has also worsened an already severe liquidity crisis in the industry. Crypto exchange Gemini and lender Genesis are among the firms said to be impacted by the fallout from FTX’s insolvency.

Last week, veteran investor Mark Mobius told CNBC that bitcoin could crash to $10,000 next year, a more than 40% plunge from current prices. The co-founder of Mobius Capital Partners correctly called the drop to $20,000 this year.

Nevertheless, Draper is convinced that bitcoin, the world’s largest cryptocurrency, is set to rise in the new year.

“I expect a flight to quality and decentralized crypto like bitcoin, and for some of the weaker coins to become relics,” he told CNBC.

Draper, the founder of Draper Associates, is one of Silicon Valley’s best-known investors. He made successful bets on tech companies including Tesla, Skype and Baidu.

In 2014, Draper purchased 29,656 bitcoins confiscated by U.S. Marshals from the Silk Road dark web marketplace for $18.7 million. That year, he predicted the price of bitcoin would go to $10,000 in three years. Bitcoin went on to climb close to $20,000 in 2017.

Some of Draper’s other bets have soured, however. He invested in Theranos, a health startup that falsely claimed it was able to detect diseases with a few drops of blood. Elizabeth Holmes, Theranos’ founder, has been sentenced to 11 years in prison for fraud.

‘The dam is about to break’

Draper’s rationale for bitcoin’s breakout next year is that there remains a massive untapped demographic for bitcoin: women.

“My assumption is that, since women control 80% of retail spending and only 1 in 7 bitcoin wallets are currently held by women, the dam is about to break,” Draper said.

Crypto has long had a gender disparity problem. According to a survey conducted for CNBC and Acorns by Momentive, twice as many men as women invest in digital assets (16% of men vs. 7% of women).

“Retailers will save roughly 2% on every purchase made in bitcoin vs dollars,” Draper added. “Once retailers realize that that 2% can double their profits, bitcoin will be ubiquitous.”

Payment middlemen such as Visa and Mastercard currently charge fees as high as 2% each time credit cardholders use their card to pay for something. Bitcoin offers a way for people to bypass the middlemen.

However, using the digital coin for everyday spending is tough, since its price is very volatile and the coin is not widely accepted as currency.

“When people can buy their food, clothing and shelter all in bitcoin, they will have no use for centralized banking fiat dollars,” Draper said.

“Management of fiat is centralized and erratic. When a politician decides to spend $10 trillion, your dollars become worth about 82 cents. Then the Fed needs to raise rates to make up for the spend, and those arbitrary centralized decisions create an inconsistent economy,” he added. Fiat currencies derive their worth from their issuing government, unlike cryptocurrencies.

Meanwhile, the next so-called bitcoin halving — which cuts the bitcoin rewards to bitcoin miners — in 2024 will also boost the cryptocurrency, according to Draper, as it chokes the supply over time. The total number of bitcoins that will ever be mined is capped at 21 million.

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December 5, 2022

China’s Baidu says it expects ‘limited’ impact from U.S. chip curbs

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“We think the impact is quite limited in the near future,” Dou Shen, executive vice president and head of Baidu AI Cloud, said of the U.S. chip export controls.

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Chinese tech company Baidu expects that impact from U.S. chip sanctions on its businesses will be “limited,” a company executive said on Tuesday during a Q&A session of its third quarter earnings call.

In October, the United States imposed export controls limiting American businesses from selling semiconductors and chipmaking equipment to Chinese chip manufacturers.

“We think the impact is quite limited in the near future,” said Dou Shen, executive vice president and head of AI Cloud group, in response to an audience member’s question about how the curbs will affect Baidu’s ability to grow its artificial intelligence cloud computing arm and autonomous driving businesses, which depend on advanced AI chips.

“A large portion of our AI Cloud business and even wider AI business does not rely too much on the highly advanced chips,” said Shen.

Baidu also runs a robotaxi business, Apollo Go, which has secured permits in Beijing, Wuhan and Chongqing’s Yongchuan District to run a fully driverless commercial robotaxi service in those places.

“And for the part of our businesses that need advanced chips, we have already stocked enough in hand to support our business in the near term,” he said.

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Shen added that Baidu develops its own AI chip, named Kunlun. He said Baidu has already started to use Kunlun chip to support some large-scale AI-computing tasks internally and to serve external customers.

“Because we have full stack of AI capabilities from chips to frameworks to foundation models and to application software, we can achieve much higher efficiency as we optimize the AI tasks from end to end,” Shen said.

He added that automotive chips are not on the prohibited list. “So, this means that in the near future, in-vehicle computing is not affected,” he said.

An analyst told CNBC’s “Squawk Box Asia” Wednesday that Baidu is “absolutely” a top pick, citing chip resilience as one of the reasons.

“They are diversifying the manufacturing into their own facility and starting to use their own chips, Kunlun, for advanced applications,” said James Lee, a U.S. and China internet analyst from Mizuho Securities.

Baidu posted yesterday a better-than-expected gain in revenue after cost cuts bolstered its bottom line. Online advertising also performed better than expected despite challenging economic conditions such as Covid restrictions and inflation.

Baidu stock rose 2.61% Wednesday and is down 35.7% year to date.

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November 23, 2022

Hong Kong stocks suffer worst single-day rout since 2008 as Xi consolidates power

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Hong Kong stocks suffered their worst single session since the 2008 financial crisis after Chinese leader Xi Jinping tightened his grip on power.

The Hang Seng
HSI,
-6.36%
ended more than 6% lower to a new 13-year low, with tech giants including JD.com
9618,
-13.17%

JD,
-0.02%,
Baidu
9888,
-12.20%

BIDU,
-2.29%,
Tencent
700,
-11.43%
and Alibaba
9988,
-11.42%

BABA,
+0.22%
dropping between 11% and 13% each.

The local Shanghai Composite
SHCOMP,
-2.02%
index fell a less dramatic 2%.

Over the weekend, the 69-year-old Xi secured his third term as general secretary of the Chinese Communist Party. Reporters captured video of former Chinese President Hu Jintao getting escorted out of the closing ceremony. Four of the seven standing committee members were replaced, all of whom are at least 60 years old.

Analysts at Goldman Sachs say most of the new appointees worked with Xi at earlier stages of their careers. “We note that incoming leaders could arguably be more focused on ideological and political subjects while the retiring policymakers appear more economy/market-oriented,” they said.

They added that for valuations to improve, more clarity on the zero COVID policy, stabilization of the property markets, and de-escalation of both cross-straits and U.S.-China tensions would be needed.

China also reported delayed data, saying its economy grew at a 3.9% year-over-year rate in the third quarter, up from 0.4% in the second quarter.

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October 24, 2022

Google shuts down Translate service in China

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Google pulled its search engine from China in 2010 because of heavy government internet censorship. Since then, Google has had a difficult relationship with the Chinese market. The end of Google Translate in China marks a further retreat by the U.S. technology giant from the world’s second-largest economy.

Budrul Chukrut| SOPA Images | LightRocket | Getty Images

Alphabet’s Google on Monday said it shut down the Google Translate service in mainland China, citing low usage.

The move marks the end of one of its last remaining products in the world’s second-largest economy.

The dedicated mainland China website for Google Translate now redirects users to the Hong Kong version of the service. However, this is not accessible from mainland China.

“We are discontinuing Google Translate in mainland China due to low usage,” Google said in a statement.

Google has had a fraught relationship with the Chinese market. The U.S. technology giant pulled its search engine from China in 2010 because of strict government censorship online. Its other services — such as Google Maps and Gmail — are also effectively blocked by the Chinese government.

As a result, local competitors such as search engine Baidu and social media and gaming giant Tencent have come to dominate the Chinese internet landscape in areas from search to translation.

Google has a very limited presence in China these days. Some of its hardware including smartphones are made in China. But The New York Times reported last month that Google has shifted some production of its Pixel smartphones to Vietnam.

The company is also looking to try to get Chinese developers to make apps for its Android operating system globally that will then be available via the Google Play Store, even though that’s blocked in China.

In 2018, Google was exploring reentering China with its search engine, but ultimately scrapped that project after backlash from employees and politicians.

American businesses have been caught in the middle of continued tensions in the technology sphere between the U.S. and China. Washington continues to fret over China’s potential access to sensitive technologies in areas such as artificial intelligence and semiconductors.

In August, U.S. chipmaker Nvidia disclosed that Washington will restrict the company’s sales of specific components to China.

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October 3, 2022

Tag: Baidu Inc

Read more about China from CNBC Pro

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