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Hi everyone. With the US-China tech war remaining the biggest story in town, we’ve got a scoop for you on how Huawei is aiming at the big new market of autonomous cars. Also singed by tech war fire is a Chinese company’s plan to become the first homegrown mass producer of DRAM chips. China’s warning to global tech giants marks a further salvo. For respite, check out North Korea’s passion for smartphones or ‘PUBG Mobile’, the world’s most popular mobile game.

The Big Story — Exclusive

Huawei, the Chinese company at the centre of the US-China tech war, is pushing ahead with an ambitious plan to launch self-driving cars in co-operation with European, Japanese and Chinese car manufacturers as early as 2021, according to this scoop from the FT. The telecoms equipment company is developing the artificial intelligence backbones that such vehicles require.

Key implications: Dang Wenshuan, Huawei’s chief strategy architect, says up to about 70 per cent of the value of an autonomous car will come from the AI systems embedded in such vehicles. This means that although Huawei has no intention of becoming a traditional car manufacturer, it looks likely to become deeply embedded as a supplier to the cars of the future.

Upshot: For Huawei, the push into self-driving vehicles, which will be operated through 5G telecoms signals, looks set to open a whole new market. For Chinese car companies, the new technology is seen as a chance to steal a march over European and US brands. For AI companies including Google, which is widely regarded as the tech leader in this space, it means game on.

Mercedes’ top 10

A round-up of the week’s best tech stories from the FT’s Asia tech reporter Mercedes Ruehl.

  1. One scoop to start from Nikkei Asian Review: A Chinese company less than three years old is set to become the country’s first mass producer of locally designed dynamic random-access memory (DRAM) chips. Output from Changxin Memory Technologies will be small but it is a breakthrough for Beijing, which wants to be self-sufficient in core technology.
  2. It was another full week of Huawei news. China, seeking to ensure the world of its tech prowess in the face of US restrictions, skipped trial 5G licences and accelerated the issuance of commercial 5G licences to carriers.
  3. Beijing also flexed its muscles with global tech giants, warning them they would face dire consequences if they comply with the US ban on key technology to Huawei and other Chinese companies.
  4. The crackdown on Huawei should be a boon for rival Samsung, which may get to retain its crown as the world’s largest smartphone maker this year. But the South Korean conglomerate is struggling to contain a semiconductor slump, an accounting fraud scandal and tumbling market share.
  5. One of the winners from the trade tensions is south-east Asia. Chinese companies have sharply accelerated investment into the region in a bid to avoid US tariffs.
  6. Rare earths, on which the tech and military industries depend, have been thrust into the centre of the US-China trade war. The FT’s News in Focus podcast explains how the world became so dependent on the obscure minerals, which are overwhelmingly produced in China.
  7. SoftBank boss Masayoshi Son has a “winner take all” approach to investing in tech companies. That strategy is being challenged by rival “unicorn” companies in China and south-east Asia just as the Japanese company prepares to launch a second $100bn Vision Fund, reports NAR.
  8. Foxconn Technology is both the world’s largest assembler of Apple iPhones and China’s biggest private sector employer. But its position is being threatened by the US-China tensions and from advances in artificial intelligence, reports the FT’s Kathrin Hille in Taipei.
  9. North Koreans are smartphone enthusiasts, according to NAR’s Kim Jaewon. Just don’t go trying to use the devices for international calls and internet access or that would mean up to five years of hard labour for you.
  10. Are you playing the world’s most popular mobile game? More than 100m people a month fight to the death on PUBG Mobile, Tencent’s battle-royale game.

When sages speak

  • For an insightful take on Huawei and innovation, check out this report by Iacopo Monterosa at the European Centre for International Political Economy.
  • Ethics in AI is becoming a hotter topic in China, as elsewhere. In this issue of the ChinAI newsletter, Jeff Ding profiles the views of Zeng Yi, head of China’s new AI Ethics and Safety Research Center.

In the spotlight

Contemporary Amperex Technology, only eight years old and already the world’s largest electric vehicle battery producer by sales, has forged another partnership with a global carmaker. The Chinese company will supply Toyota with the critical components, the first time the Japanese carmaker has sourced from Chinese manufacturers.

Global carmakers are increasingly turning to China, which is widely expected to become the world’s largest market for electric vehicles, to power their electric vision. Many are juggling expected massive demand for EVs — Toyota expects half of its global sales to come from such vehicles by 2025 — with inadequate supply arrangements. Chinese companies such as Fujian-based CATL, founded by Robin Zeng, are happy to fill the void.

Smart data

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Asia payments revenues are forecast to grow to $1.6tn in 2022, making it the fastest-growing region globally. China plays a huge role in that figure but traditional lenders, facing the prospect of new fintech companies eating their lunch, are partnering with digital players to position themselves and boost their customer base in south-east Asia and India as well.

US bank Citigroup this week teamed up with Singapore-based ride-hailing company Grab to launch co-branded credit cards. This is on top of a similar credit card deal with Indian payments company Paytm last month. The bank reckons working with the most successful digital players could boost its Asian customer base of 16m by another 2m over the next couple of years as it taps into where regional consumers do most of their spending: on smartphones.

It is a global trend, as the launch of a new credit card from Goldman Sachs and Apple shows.

Job market

  • Jeremy Choy, head of mergers and acquisitions at China Renaissance, is joining HSBC as head of Asia tech M&A, reporting to the head of and head of corporates for Asia-Pacific.
  • South-east Asian ride-hailing company Grab has hired Leslie Teo, formerly chief economist at Singapore’s sovereign wealth fund GIC, to join its data science team.
  • Grace Chong has joined Simmons & Simmons as an of-counsel in the firm’s financial markets team in Singapore as a regulatory and technology, media and telecommunications specialist covering Singapore and Hong Kong.
  • Qiming Venture Partners managing partner JP Gan, whose investments include Bilibili, Meituan-Dianping and Ctrip, has resigned from the China and US-focused venture capital firm to set up his own business.
  • Azim Premji, often described as India’s Bill Gates, will step down as chairman of Wipro, one of the country’s biggest information technology services companies. His son, Rishad Premji, vice-chairman, will take over as executive chairman of Wipro at the end of next month.

Regulation round-up

  • India, eyeing China’s lead in electric vehicles, is set to introduce regulation to push the country’s electrification. The move would have a big impact on the country’s ride-hailing, food delivery and ecommerce companies. Taxi aggregators such as Uber and Ola will reportedly be asked to convert 40 per cent of their fleets to electric by 2026.

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