President Donald Trump revealed he was imposing 10 percent tariffs on an additional $300 billion worth of Chinese goods, to go into effect on September 1. Trump made the announcement after the most recent trade talks between U.S. and Chinese delegations failed to yield any significant results, reiterating that China had not upheld its promises to buy more U.S. agricultural products and to stop selling fentanyl to the U.S.
The U.S. and China had resumed trade talks in Shanghai, with both sides saying they were “constructive” and agreeing on another round of high-level discussions to take place in Washington, D.C. in September. The talks focused on issues including the purchase of U.S. agricultural goods, forced technology transfers, intellectual property rights and nontariff barriers.
According to the Wall Street Journal, both sides were looking for demonstrations of goodwill. China reaffirmed its commitment to purchasing more U.S. agricultural goods, although they didn’t provide specifics. The Wall Street Journal posits that the lack of concrete progress could be part of China’s new tactic of not hurrying into concessions, as it waits for better terms from the U.S.
The United States had previously said it would issue licenses to companies seeking to sell to Chinese smartphone company Huawei, as long as there is no national security threat. However, Trump tweeted that China has yet to purchase any U.S. agricultural products, despite promises to do so (China claims to have purchased several million tons of U.S. soybeans, and the U.S. Department of Agriculture shows that the U.S. has shipped out 1 million tons of soybeans to China in the three weeks ending on July 18). Trump’s concessions toward Huawei have also fallen short of China’s expectations for a complete lift of the Huawei ban, which China’s former vice minister of commerce Wei Jianguo says makes it unlikely for China to follow through on agricultural promises.
China’s 5-year venture capital boom may be facing a downturn. In the second quarter of 2019, China’s total investments dropped 77 percent from the same period in 2018 to $9.4 billion, with the total number of deals roughly halved to 692. In the United States, venture capital deals rose 15 percent in the second quarter to $27.7 billion.
During that 5-year period that began when Alibaba went public in 2014, startup unicorns like ByteDance and Didi Chuxing received astronomical valuations at $75 billion and $56 billion, respectively. However, a combination of skepticism toward the profitability of the sharing economy and the United States’ accusations of Chinese espionage and IP theft, as well as U.S. restrictions on Chinese tech, has caused investors to become more cautious. Nevertheless, Chinese tech startups have managed to avoid “down rounds,” which is when companies raise capital at a lower valuation than at an earlier funding round.
Chinese e-commerce giant Alibaba will allow U.S. small merchants to sell on its Alibaba.com platform, as the company seeks to compete with rivals like Amazon. Alibaba hopes to attract these small and mid-sized businesses with the appeal of its global platform, which will open up new markets, such as India, Brazil and Canada, to these small businesses. In particular, Alibaba wants to reach out to manufacturers, distributors and wholesalers.
United States-based merchants will pay a yearly membership fee of about $2,000 to have their store on Alibaba.com, whereas on Amazon such sellers pay by month or per item. Although one-third of Alibaba’s customers are based in the U.S., 95 percent of its sellers are from China.
Alibaba has also partnered with Salesforce to become the exclusive seller of the U.S. company’s customer relationship management (CRM) software in China, possibly to use as a tool for Alibaba’s own small and mid-sized merchants and customers. The partnership with Salesforce would help Alibaba compete with its main cloud rival Tencent, which is China’s second-largest cloud platform after Alibaba, and already offers “social CRM services” through its WeChat app.
The National Basketball Association, the most popular sports league in China, has extended its existing deal with Tencent by another five years. With the deal, Tencent will carry all of the NBA’s games and content on its social media platforms, which include instant messaging service QQ, Tencent Sports and Tencent Video. Tencent will also launch advertising campaigns, as well as fan loyalty programs, for the NBA to help build up the audience in China.
Tencent is the NBA’s “biggest partner outside of the United States.” Last season, 490 million people watched NBA content across all of Tencent’s platforms, which is nearly three times the viewership of when the NBA first began streaming on Tencent in 2014.
In an effort to expand beyond social and news apps, ByteDance, the most valuable startup in the world, is venturing into the world of artificial intelligence-generated music and smartphones.
The company, which owns popular video-streaming app TikTok (known as Douyin in China), acquired some intellectual property from London-based startup Jukedeck, which could give it more music options for its platforms. TikTok, which allows users to share short videos, relies heavily on music, and having the ability to generate its own could help it circumnavigate any song rights issues.
ByteDance is also partnering with Smartisan Technologies to develop a smartphone. Although not much else was revealed in the plans, ByteDance acquired a number of Smartisan’s patents earlier this year, and a number of Smartisan’s employees have moved over to ByteDance, as well.