Tag: Baidu

China To Show Off Its EV Clout At First Auto Show Since End Of “Zero-Covid”

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China, home of the world’s largest auto market — including for red-hot electric vehicles, will open the most important industry show since the country ended its “zero-Covid” policies at the end of last year. Auto Shanghai, to be held at the city’s National Exhibition and Convention Center, will run through April 27. The stakes are high for domestic brands such as BYD and NIO and the foreign automakers that rely on the China market for much of their global sales.

What are some of the possible trends, and who will be some of the possible winners and losers to look for? To learn more, I talked on Sunday to Tu Le, founder of Sino Auto Insights, a consultancy that follows China’s auto industry. Le is a long-time China veteran who relocated to the Detroit area during the pandemic and now is back in Shanghai for the show. Edited excerpts follow.

Flannery: What are some of the big things you’re looking for at the show?

Le: Who is attending? Industry leaders? Foreign journalists? I want to see the level of interest, foot traffic, excitement, the energy and the electricity of the show. The Beijing and Shanghai auto shows are basically the only relevant auto shows left in the world. In China, you see exciting new products, new features and new brands. That’s why I want to be here.

Flannery: Are you expecting a big foreign crowd?

Le: There will be more management team members from overseas since they’ve likely not visited in the past three years. They’ll hit the streets and see all the EVs and their jaws will drop. They are going to be amazed by the number, the diversity, the quality and the design of them all. They should be clearly concerned — that’s going to be a theme.

Flannery: What else are you looking for?

Le: The first set of EV front consoles were just like an iPad bolted onto the center stack or center console. I’m looking for mature designs and features among all of the brands, with AI features and smart connectivity for personal assistance and with more integration with your mobile phone.

Another trend will be the expansion of intelligent driving systems. Vehicles will have more and more sensors. Chinese consumers place a lot of importance on safety, and advanced driving assist systems (ADAS) imply safety by helping monitor, control and steer a vehicle – also ADAS systems not just in premium vehicles but also in more affordable vehicles。

Flannery: What about older foreign brands, such as Ford or GM?

Le: Is it going to be “The Empire Strikes Back?” Generally, the legacies have been kind of sitting on their hands the last couple of years — none of the EV products they’ve launched have truly resonated with the Chinese consumer or really gotten any sustainable demand. The Chinese EV companies have really stolen the show.

Will any one of them step up and launch a vehicle or product or features that will grab the attention of the media? I’m looking for that. I’m hoping that they’re motivated to show the Chinese consumers that they are very important to them, are bringing their best products, and are worthy and able to compete with the best of the Chinese.

Flannery: How about Tesla?

Le: Tesla actually will not be at the show and I don’t know how much of the needle is going to move for Tesla this year in China without another price cut. There is a rumored refresh of the Model 3 on its way later this year for the China market and that might move the needle pretty significantly in Europe and the United states if it launches in those markets since there’s not as much competition with mid-size sedans. Their Model 3 is a mass- market sedan in China now. It’s not a premium sedan anymore, not at the price point that it sells in China.

Let’s be clear on that. The market segment for 300,000 yuan and below crossovers/SUVs and sedans is the most brutal in China. There are a ton of brands that play in that space and a ton of choice.

Flannery: So how about the local makers such as BYD?

Le: They will have their Yangwang premium brand. My question is whether they can step it up. They’ll show us what a premium vehicle priced at one million rmb looks like. Is the feel and the experience going to be premium? They can sell at three hundred thousand rmb and below. Can they show Chinese consumers they can play at that one million rmb space?

Flannery: How about NIO?

Le: Their vehicle lineup seems pretty strong. They need to be able to produce them. Another question is how the refresh for models like the ES6 and ET7 will be.

Flannery: XPeng?

Le: They need a good show. They’ve had a few product launches that have been a bit lackluster. They’re hoping for a huge turnaround, I’m curious to learn more details about their overall strategy. XPeng is a competitor to BYD. They play in the same space — the mass market but they position themselves a bit more premium and technologically advanced. They have failed to really grab the sales volume necessary for them to definitively say they’ve been successful. They hired Great Wall’s former president Feng Wangying to help create efficiencies and build a sales team.

Flannery: Where’s Xiaomi in all of this?

Le: They’re not ready to show any product. They’re still due to launch their products in 2024.

Flannery: What about Li Shufu’s brands – he has so many now, including Volvo, Zeekr, Polestar and others? He was China’s richest auto billionaire on the Forbes Billionaires List this month. (See related post here.)

Le: One of the brands that Geely has invested in that isn’t at the show is Jidu Auto, their joint venture with Baidu. I had a chance to visit them two days ago and see a beta version of the interior. Their first product is supposed to be delivered to customers later this year. It will be quite impressive if they can execute what I saw properly.

Volvo is doing well and has never sold more vehicles in China. Li Shufu gave them enough capital to invest in building great products and did the right thing by leaving them alone. They were a niche brand before but have gone more mainstream. Before Geely acquired them, the global market was challenging for Volvo, but they’ve launched some good products with some exciting new EVs on the way.

Flannery: What about Zeekr?

Le: Zeekr is interesting. They plan to IPO in the U.S. this year and recently unveiled a sub-¥200K small SUV the Zeekr X. They are among the companies that have called out Tesla as a target.

Some of the larger Chinese domestic players need to reconcile their brand strategy. Geely, for instance. Zeekr originally was only supposed to sell at 300,000 yuan and above but has lower prices, too. They could be competing against one another and cannibalizing sales of their brother and sister Geely brands.

Flannery: How about other Chinese brands? And where is Alibaba in the mix this year, besides investing in XPeng?

Le: People mostly talk about the U.S. publicly traded companies — Li Auto, XPeng and NIO. But GAIC Ion is doing well. Alibaba helps a few EV companies on the technology side and has a joint venture with SAIC called IM Motion. Alibaba is a formidable player in the EV space here.

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Micron Probe May Hurt China’s Efforts To Attract Foreign Investment

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ChatGPT frenzy sweeps China as firms scramble for home-grown options

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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.


Also Read | ChatGPT and the future of journalism

“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 ($1.47) to ask 20 questions.

Mr. 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.


Also Read | Analysis | Can ChatGPT write a scientific paper? Should it?

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.

Mr. 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.

Mr. 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.

Mr. 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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Asian IPOs In U.S. Poised To Increase As Region’s Economies Recover, Nasdaq Vice Chairman Says

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In 2019, the year before Covid upended global travel and business, the Nasdaq attracted 33 listings from Asia-Pacific companies. All but five were from China, underscoring the country’s heft as the world’s No. 2 economy and the strength of its tech sector. Chinese Internet billionaires that have listed their main business on the Nasdaq over the years include Robin Li, chairman of Baidu and Richard Liu of JD.com.

This year, with Asia helping to lead a global economic recovery from Covid, the number of listings from the region may beat that pre-Covid number, Vice Chairman Robert McCooey, Jr. said in an interview. “Our pipeline is super strong,” McCooey said via Zoom, noting 94 active “F-1” filings with the U.S. Securities and Exchange Commission by Asia-Pacific businesses aiming to go public.

China businesses and entrepreneurs that led the way in 2019 may have to share the stage with those from other Asia nations this year, however, McCooey said. Though it’s impossible to say for sure how many will come through, McCooey noted that only about half of those F-1 filers are from Chinese companies.

“If you rewind the clock three-four-five years, 80% of them would have been Chinese and only a small number from other parts of Asia,” including Singapore, South Korea and Japan, he said. “The fact that 50% of them come from China is great, but I think it does show where the market has shifted over the past few years,” McCooey said. “We’re casting a broader net here that includes China, but also looking at Asia (overall).”

To be sure, the Nasdaq is mostly for U.S. companies – they account for about 80% of the 4,000 businesses that trade there. Yet the remaining 20% — or about 800 — are based overseas. Among the largest are JD.com and Trip.com from China. Even amid the pandemic last year, a total of 48 international listings came to Nasdaq (including SPAC IPOs), 30 of which were from the Asia-Pacific. Some of biggest listings in 2022 were Gogoro, a Taiwan operator of a battery-swapping platform and scooter maker, and Atour Lifestyle Holdings, a mainland China hotel chain operator.

There remains an international listing backlog this year in part due to the difficulties of traveling during the pandemic, said McCooey, a 15-year Nasdaq veteran who oversees IPOs from Asia and Latin America. A shadow over China fundraising lifted in December when the U.S. regulators said they had reached an agreement over auditing of Chinese-listed firms that had caused new listings from the country to grind to a near halt. This week, Hesai Group, a supplier of sensors for self-driving vehicles whose investors include Baidu and smartphone maker Xiaomi, is expected to list. So far, there have been four other international listings on the Nasdaq this year, three of which were from the Asia-Pacific: Cetus Capital Acquisition, Quantasing Group and Lichen China.

Aside from the easing of Covid-related restrictions in China itself, hopes for a recovery in Chinese listings at the Nasdaq got a boost when China’s New York consulate chief Huang Ping came to ring an opening bell last month to mark the Lunar New Year.

Whether China gains actually materialize will also depend in part on confidence among listees and investors alike, he said. “Success begets success,” said 57-year-old McCooey. “That’s what my dad used to always say.” The more companies that go public and are successful, the more confidence others will have to follow them and go down that path, he said.

One further challenge this spring for China firms and their underwriters will be fallout from the U.S. downing of the suspected spy balloon this month, stoking Cold War fears. McCooey said he didn’t expect an impact on listings. “Tensions between the U.S. and China have gone on for decades,” he said. “They just get heightened in the press sometimes more during certain periods.”

Also potentially poised for a good year in 2023, believes McCooey: U.S. listings by companies from Southeast Asia. “There’s been a tremendous amount of growth in the companies in the region,” he said. “Companies have now grown to a size and a scale” and in industries associated with the Nasdaq such as technology, healthcare, consumer logistics, and robotics, McCooey said. “They’re interested in the U.S. market and they’re growing.”

Among the 18 Asia-Pacific companies to file F-1s since December, four have come from Singapore, including CytoMed Therapeutics, a biotech firm, and IMMRSIV, a software company.

“There’s been a lot of money that has left other parts of Asia (and) come into Singapore. It’s looked at as kind of the Switzerland of Southeast Asia and warm and welcoming,” he said. “A lot of people are comfortable there, a lot of businesses are comfortable there, and the business climate is good there. There just are a lot of factors that are working in (Singapore’s) favor right now. And then obviously, with some of the geopolitical tensions that have gone on, companies (will) try to remove themselves from that.

Although India hasn’t accounted for many international Nasdaq issuers of late, owing to restrictions by the country on direct overseas listings (companies have to list at home first), McCooey said he’s also optimistic that more businesses from that country will also seek to tap U.S. markets.

“I’ve been a huge believer in India for years,” said McCooey, a graduate of College of the Holy Cross in Worcester, Massachusetts. “It’s just too large, and an amazing market for us not to think about it that way. It just takes a while.”

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Language Gaps Hold Back U.S. Companies In Fast-Growing Asia: KPMG Economist

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