Beijing's Regulatory Crackdown Wipes $1.1 trln off Chinese Big Tech

The Chinese national flag is seen in Beijing, China. Credit: Reuters File Photo
The Chinese national flag is seen in Beijing, China. Credit: Reuters File Photo
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Beijing's Regulatory Crackdown Wipes $1.1 trln off Chinese Big Tech

The Chinese national flag is seen in Beijing, China. Credit: Reuters File Photo
The Chinese national flag is seen in Beijing, China. Credit: Reuters File Photo

China's major tech companies have shed more than $1 trillion in value -equivalent to the entire Dutch economy - since the government's regulatory crackdown on the sector began more than two years ago, according to Refinitiv data.
Investors are now hoping the strict rules that have stymied growth since late 2020 will start to ease, after the People's Bank of China (PBOC) indicated a change in direction could be under way.
The central bank said on Friday most of the main problems for platform companies' financial businesses had been rectified, and regulators would shift their focus to the industry as a whole rather than specific companies.
The state planner on Wednesday praised Tencent Holdings, the world's largest video game company, and e-commerce titan Alibaba Group, for their contributions to China's tech innovation, in another sign that authorities are warming to the technology sector once more.
Analysts pinpoint the shelving of Alibaba affiliate Ant Group's $37 billion initial public offering (IPO) in November 2020 as the start of a sweeping regulatory crackdown on mainland China's tech firms, which had grown rapidly in size and influence.
Since then, roughly $1.1 trillion has been wiped from the market capitalisation of the Hong Kong-listed stock of Alibaba Group, Tencent, Chinese food delivery giant Meituan , search engine provider Baidu Inc and e-commerce site JD.com.
Share prices for the five companies have plunged between 40.4% and 71% during that time.
Technology stocks in Hong Kong have rallied 4.1% since Monday as investors bank on an easing regulatory environment to boost earnings, but some analysts have sounded a note of caution.
"Mega-cap tech companies will allocate increasingly large amounts of capital expenditure towards developing generative AI technologies and products in a hostile external environment, potentially impacting profitability," said Redmond Wong, Saxo Markets strategist in Hong Kong.
Steven Leung, UOB Kay Hian sales director, said current valuations would last "until we see more supporting policies from authorities".



Apple Launches New iPad Air with AI Features to Stoke Demand

The Apple Inc logo is seen at the entrance to the Apple store in Brussels, Belgium November 28, 2022. REUTERS/Yves Herman/File Photo
The Apple Inc logo is seen at the entrance to the Apple store in Brussels, Belgium November 28, 2022. REUTERS/Yves Herman/File Photo
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Apple Launches New iPad Air with AI Features to Stoke Demand

The Apple Inc logo is seen at the entrance to the Apple store in Brussels, Belgium November 28, 2022. REUTERS/Yves Herman/File Photo
The Apple Inc logo is seen at the entrance to the Apple store in Brussels, Belgium November 28, 2022. REUTERS/Yves Herman/File Photo

Apple on Tuesday launched new versions of its iPad Air, enhancing the mid-tier tablet with its M3 chip and artificial intelligence capabilities in a bid to spur upgrades among customers.

The revamped lineup starts at $599 for the 11-inch model, and the 13-inch variant at $799. Pre-orders open Tuesday, with deliveries set to start on March 12.

Apple has been equipping its devices with more powerful chips designed to handle AI tasks, such as summoning ChatGPT to answer user queries, as it seeks to attract customers and keep pace with rivals including Samsung and China's Huawei that are racing to embed AI into their products.

Last month, the company launched a budget-minded phone, iPhone 16e, lowering the entry barrier for its phones with Apple Intelligence to around $600 to win back customers looking to buy mid-range phones in key markets such as India, Reuters reported.

Apple Intelligence is a set of features with access to ChatGPT that lets users write emails, messages and edit photos among other capabilities. While Apple Intelligence was not immediately available when the iPhone 16 series was launched in September last year, the company has since been rolling out a suite of AI features in more languages and regions in phases.

Last May, Apple introduced a generation of iPad Air with M2 chip, with the 11-inch device sporting the same price as the latest version.

The company said on Tuesday that while it has updated the regular iPad with double the storage for the base variant and the A16 chip, the product will not support Apple Intelligence.

The company's iPad sales came in at $8.09 billion for the holiday quarter, above estimates of $7.32 billion, according to data compiled by LSEG. Over half of the sales in the three-month period were to customers who were new to iPad, the company said.