June 7, 2020: India, Semiconductor, Zoom, JD.com, 5G, Kuaishou

Note: This issue of Interconnected Weekly covers the period between June 1-7, 2020, with six news stories – three from English language sources, three from Chinese language sources – hand-picked by your humble author to further our exploration of the interconnections between technology, business, investment, and geopolitics. All translated article titles are done by me; they are not official translations from the media outlets.

“Google pulls popular app that helped remove Chinese apps from phones” (English Source: The Verge)

My Thoughts: this is the most significant yet under-discussed story of the week, when it comes to the interconnections between technology and geopolitics. The current military skirmishes caused by the ongoing China-India border dispute is heating up and has a history dating back to at least the 1960s. Anti-China sentiment in India is running high, which led to the existence and popularity of the “Remove Chinese Apps” app in India. Google removed it from the Play Store, Android’s app store, but how the app violated Google’s Deceptive Behavior Policy is unclear -- the app does exactly what its name suggests. While the US-China “cold war” sucks up all the oxygen, the China-India tension is already becoming a “hot war”.

“Chip maker SMIC plans to raise US$2.8 billion on Shanghai’s Star Market as US moves to stifle China’s tech ambitions” (English Source: South China Morning Post)

My Thoughts: This IPO may be the first “Patriotic IPO” of its kind in the technology sector. SMIC, the largest semiconductor manufacturer in China, received a $2.2 billion USD equity investment from the Chinese government three days after the latest round of sanctions on Huawei-designed chips from the U.S. Department of Commerce. Now it's listing on the Star, China’s new NASDAQ-like tech-focused exchange launched just last year. As I’ve noted in a previous post, “Chips, Geopolitics, Elections”, the connections between the semiconductor industry and both geopolitics and domestic politics are stronger than ever.

“Zoom in Talks With Google to Use Cybersecurity Service” (English Source: The Information) [Paywall]

My Thoughts: While Zoom started as an enterprise videoconferencing product, it has serious potential in the consumer market. To prepare for that potential, it is quickly evolving its multi-cloud posture to meet that opportunity to leverage the expertise of other tech companies. I’ve discussed Zoom’s evolving multi-cloud posture in “Why Zoom Chose Oracle”. Now, its multi-cloud mix may include Google Cloud Platform’s Web Risk API, a cybersecurity product that “lets client applications check URLs against Google's constantly updated lists of unsafe web resources.” Google, who’s been operating so many global-scale web services from search to Gmail, has the most expertise to help Zoom defend attacks on its free users, most of whom are ordinary consumers using the product for consumer use cases (not work meetings, but birthday parties). If this deal goes through, it could buy Zoom some much-needed time to figure out what its proper place should be in the lives of consumers around the world.

“JD.com Will Begin Its Hong Kong IPO process next Monday, Scheduled to Begin Listing on June 18th, Price Range Upper Bound 236 HK Dollars” (Chinese Source: iponews)

My thoughts: JD.com’s plan to have another public listing on the Hong Kong Stock Exchange, after its IPO on the NASDAQ in 2014, is happening in the backdrop of increasing scrutiny on the ownership structure and financial accounting of Chinese companies publicly listed in the U.S. The Holding Foreign Companies Accountable Act (HFCAA), currently making its way through the U.S. House of Representatives, is formalizing much of this scrutiny into law. This is a topic I’ve discussed in “Why Huawei Should IPO in America”. Another geopolitical backdrop to JD’s Hong Kong listing is Hong Kong’s own struggle to maintain its autonomy.

“China’s First Year with 5G: 180 Billion RMB Investment, 200,000 Antenna Stations, 36 Million Users” (Chinese Source: InfoQ)

My thoughts: last week marked the first anniversary of the issuance of 5G licenses in China. This article summarizes the progress of 5G implementation during its first year. The three major telecoms in China are developing two networks: one by China Mobile, the other by China Unicom and China Telecommunications Corporation jointly. The global 5G conversation has been contentious, both between countries and between technology companies and governments. It’s worth a close watch on how the 5G-rubber meets the road in China.

“Why Is Kuaishou Having Such A Hard Time Expanding Abroad?” (Chinese Source: 36Kr)

My thoughts: this article is about the differences in the global expansion strategy and progress between two of the hottest social media companies in China, Bytedance and Kuaishou. While TikTok (from Bytedance) appears to be getting traction in the U.S., Zynn (from Kuaishou) is also gaining ground by directly paying users to watch short videos on its app. Zynn brief took over Zoom as the #1 downloaded app in the Apple app store in America and, at the time of this writing, sits in the #2 spot, below Zoom and ahead of TikTok (#3). As Zynn grows, will it meet the same security scrutiny that Senator Chuck Schumer, the most powerful Democrat in the Senate, has been voicing on TikTok? (Note: I installed Zynn last week to test out its payment feature. So far, I’ve made $2.34.)

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