Guangdong governor focuses on big picture

Guangdong’s governor, Ma Xingrui, gave a press conference today at which he said the province’s GDP is expected to grow to more than RMB10 trillion this year. It is the way this will be achieved, rather than the number, that jumped out at us, however. He said the province will continue to “open up its market to the outside to strengthen its competitiveness”, and his No. 1 priority for the coming year is to build the Greater Bay Area by “finding solutions for cross-border issues, meeting international trade rules and facilitating the easy flow of capital, talents, goods and information within the GBA”.

Priority #2 to #5 were more interesting for a domestic audience: propelling innovation, investing more in the countryside, promoting Lingnan culture, and protecting the environment.

Priority #6 was more intriguing: To optimize the rule of law and internationalization, build a good business environment, and create the most secure, stable, fair, and legal environment in the country.

Roll on, Governor. Let’s see what comes next.

Read more (in Chinese).

Huizhou crypto star wins Buffet lunch for US$4.57m

Huizhou’s 28-year-old cryptocurrency pioneer Justin Sun bid a record US$4.57 million for the pleasure of having lunch with Warren Buffet, reports Bloomberg.

Sun launched Tronix, also known as Tron or TRX token in 2017. It’s valued at $2.56 billion and is the 10th largest cryptocurrency in the world.

Buffet once famously referred to Bitcoin as “probably rat poison squared”. Undaunted, the young Chinese entrepreneur said he hopes to educate the Oracle of Omaha on cryptocurrency and the underlying technology, blockchain.

Read more.

Mainland study scheme opens for HK students

The Mainland University Study Subsidy Scheme opened for applications on Monday, according to an announcement issued by the Hong Kong government. The Education Bureau said the scheme will benefit Hong Kong students with different financial needs pursuing undergraduate studies at 181 designated mainland institutions.

According to the press release, students who pass a means test will receive either a full-rate subsidy of HK$16,800, or a half-rate subsidy of HK$8,400 a year. Under the non-means-tested program, eligible students will receive an annual subsidy of HK$5,600. The application deadline is Sept 2.

Details here.

Hengqin opens center for young Macanese

Zhuhai’s Hengqin New Area has opened a center to support young aspiring business leaders from Hong Kong and Macau, joining Guangzhou and Shenzhen in rolling out the red carpet for under-40 entrepreneurs, reports the Xinhua New Agency.

The Guangdong-Macao Youth Innovation and Entrepreneurship Base (Hengqin) will support young entrepreneurs and startups with personnel training and counselling services on issues including business registration, tax, policy and financing, according to the Hengqin government.

JD.com buys industrial land in Dongguan

Ecommerce giant JD.com has won a bid for a parcel of industrial land in Dongguan for RMB1.064 billion. But it won’t be putting what most investors might expect it to put there. Rather than a smart factory, JD said it will name the development JD Smart Valley, because it is where a “technological innovation center” will be built in accordance with local real-estate development policies.

This so-called “new usage of industrial land” policy requires a certain proportion of land be used for commercial as well as residential development. For the part of the land that can be sold and/or subdivided, the leasing period is 40 years; for the remainder it is 50 years. The residential portion can go for 70 years.

Read more (in Chinese).

BYD to build 7th battery plant in Guangzhou

Shenzhen-based new energy car maker BYD will build its seventh battery plant in Guangzhou, according to the Xinhua News Agency. The RMB4 billion (USD579 million) facility will focus on research and development, production and manufacturing of lithium polymer batteries for electric devices such as mobile phones, laptops and computers.

It is aiming for an annual output of RMB13 billion once it launches in 2020. Construction will start in late June. 

BYD’s battery division has become independent of the car-making parent and works closely with other original equipment manufacturers to cope with increasing pressure from rivals like CATL. BYD plans to list its battery business by 2020, Wang Chuanfu, the firm’s founder, said previously.

Huawei to sell undersea cable business

Huawei plans to sell its undersea telecom cable business in its first major asset sale since the US blacklist action, reports Reuters. Control of Huawei Marine will go to another Chinese firm, Hengtong Optic-Electric, based in Jiangsu province, in a deal done in cash and shares.

Undersea cables are the backbone of global internet traffic. Huawei has been gaining share in the market dominated by U.S. firm SubCom, Japan’s NEC Corp and Europe’s Alcatel-Lucent, since Huawei Marine was established in 2008 as a joint venture with Britain’s Global Marine.

Read more.

Shenzhen welcomes CCB Wealth Management

CCB Wealth Management, a wholly owned subsidiary of the Construction Bank of China, celebrated its opening in Shenzhen on Monday. Established in May with a registered capital of RMB15 billion, the new entity is set to take over management of the bank’s RMB2.2 trillion in wealth management products.

According to Shenzhen Mayor Chen Rugui, the bank’s choice of Shenzhen to establish its first nationwide wealth management subsidiary is significant for the city’s development. Moreover, CCB Wealth Management will effectively boost the development of financial services throughout the entire Greater Bay Area as well.

Read more (in Chinese).

Huawei, ZTE set for Chinese 5G boom?

The Greater Bay Area’s two dominant mobile-equipment manufacturers, who also happen to be China’s biggest, and the world’s biggest, are at a crossroads in their development, to put it mildly. The SCMP asks the question on everyone’s minds today, with an article that explores what will likely happen to them in the next stage of China’s 5G rollout. Will they be able to push the country past its Western rivals as China prepares to roll out commercial 5G services via the three big telcos? Or will they lose market share to Nokia and Ericsson?

In our minds, it’s a no-brainer. The idea that Beijing would to turn to Swedes and Finns, and hand them the keys to 1.2 billion existing smartphone subscribers, let alone the billions of new devices that will be internet-enabled with 5G in China, is laughable. Before the Huawei ban, they might have stood a chance to keep a sliver of their existing market share. Now? Forget it. The bifurcation of the technology universe is likely well under way. And Huawei and ZTE are sitting in the bigger – exponentially bigger – side of it.

The real question, as the article allows, is how long China’s 5G rollout will be delayed by the US ban on Huawei getting supplies from US companies. That question was emphatically answered today by the leak from Shanghai that 5G commercial licenses will be awarded this week. However, the details are still unclear as to how fast and how wide the rollout will be.

The question for us down here on China’s southern tip is where we fit in. Our prediction is that Shenzhen and Guangzhou will lead the way for China Mobile, China Telecom, and China Unicom, making use of Huawei and ZTE equipment that rolled off production lines months ago. The rest of the Greater Bay Area will be pulled along quickly, as this is where the country’s deepest consumer markets are concentrated. By the end of next year, our region will likely have more than 90 million people and an untold number of new devices hooked up and generating data in ways currently unimaginable – at least, unimaginable in western societies that don’t have such crazed digital citizens as we do here.

Shanghai will want to keep up, and perhaps Beijing, too. But the GBA is where the action will be. If there is any delay in nationwide 5G rollout, it won’t likely be felt here.

What wider commercial potential will be unlocked for the GBA as this technology upgrade happens? That remains to be seen. We are on the side of the futuristic-optimists: far from being a time of troubles amid the deteriorating US-China relationship, we see the GBA entering a “2.0” phase of its economic development from 2020. Stay tuned.

Sneak peek at Shenzhen air taxis

We teased readers yesterday by directing them to a video produced by a leading contender for “air taxi” services in the Greater Bay Area, a Shenzhen-based company called EHang. Today, we were reminded that “urban air mobility” (UAM), once considered the stuff of science fiction, will be launched by Airbus and the Shenzhen city government before the end of this year.

Here you can see how Airbus imagines Shenzhen looking one day in the not-distant future. Blade Runner fans will love it. (On the Airbus website, scroll down to the second video clip.)