After threatening to severely limit Chinese investment in the United States, Trump has backed off from his statements. Instead, the White House says it plans to work with Congress on more moderate trade measures, such as broadening the powers of the Committee on Foreign Investment in the U.S. Earlier, reports indicated that Trump planned to block companies with 25 percent or more Chinese ownership from investing in U.S. companies with “industrially significant technology” and to block additional tech-related exports to China.
However, Trump is still pushing forward with tariffs on $50 billion of Chinese imports. Trump said in a statement that he ordered U.S. Trade Representative Robert Lighthizer to identify a second set of Chinese goods worth $200 billion for tariffs of 10 percent if China didn’t meet his demands to make trade concessions. Trump also threatened to double those additional trade penalties should China try to retaliate against the second set. The first set of tariffs will add 25 percent to the price of Chinese goods, with implementation expected to begin on July 6.
The Chinese government is following in Trump’s footsteps. Immediately after Trump first announced the tariffs, China hit back with similarly sized retaliatory tariffs of their own, aimed at “high-value American exports.” China expanded its list of U.S. products subject to tariffs from the initial 106 to 659, with most of the new goods related to agriculture, seafood and energy. Their first round of tariffs, estimated to be on about $34 billion of U.S. products, is also expected to be implemented July 6, followed by a secondary round of tariffs on $16 billion of U.S. imports. The product categories targeted by China in the first round range from pork and soybeans, to sport-utility vehicles and electric vehicles. For the second round of tariffs, set to begin at a later date, China plans to target medical devices, coal, chemicals and crude oil.
Alibaba’s financial services affiliate, Ant Financial, is now worth $150 billion after a $14 billion fundraising round, pushing it past Morgan Stanley and Goldman Sachs in equity value. Market watchers called it the “biggest-ever” single fundraising by a private company. Ant Financial oversees Alipay, China’s most widely used mobile payments platform. The fundraising is likely to boost Ant Financial’s “firepower” ahead of its widely expected initial public offering on the Hong Kong and mainland China stock exchanges.
Ant Financial is also now using blockchain technology to lower costs of international money transfers by eventually eliminating the cost of remittances. Currently, the blockchain service is only available for AlipayHK and can only be used to transfer money between Hong Kong and the Philippines. Ant Financial partnered with Philippines-based mobile payments platform GCash for the pilot project, with Standard Chartered acting as the settlement bank for both. In the future, Ant Financial says it plans to add partnerships with mobile networks to expand into other areas.
Alibaba’s main e-commerce rival, JD.com, received a $550 million investment from Google, which both sides describe as the first step to a “broader partnership.” Part of that partnership will entail promotion of JD.com products on Google Shopping, which could help JD.com establish presences in the U.S. and Europe. Both companies also stated plans to “co-develop” retail infrastructure in several markets, including Southeast Asia.
For Google, the partnership could help the company compete against Amazon by boosting its presence in China, where Amazon comprised less than 1 percent of the e-commerce market in 2016. One of JD.com’s key investors is Walmart. Google joined forces with the American retail giant in 2017 to sell Walmart products on its Google Assistant platform and hopes to tighten ties further with this partnership. (Walmart has a 77 percent stake in Indian e-commerce company Flipkart, which is Amazon’s main rival in that region.) Partnering with JD.com could also give Google access to more consumer data, which could enhance the Google Shopping experience and boost the number of users.
Donald Tang’s Tang Media Partners (TMP) and Hollywood producer Jason Blum’s Blumhouse Productions have struck up a partnership to develop Chinese-language horror and thriller films. Blumhouse is behind some of the most successful horror films at the box office in recent years, such as the Oscar-winning “Get Out,” and the lucrative “Insidious” and “Paranormal Activity” films.
Tang Media and Blumhouse plan to co-develop and co-finance a slate of projects for the Chinese market that will be jointly produced in China and the U.S. Jason Blum was quoted as saying that they were looking at local media and folklore for inspiration for the collaborations. Their first project is titled “American Nightmare,” which will be a Chinese-language horror movie filmed in Los Angeles, though no further information has been provided.
There are some concerns over how the content will be received. Horror films haven’t quite caught on in China, mainly due to regulatory concerns from censors, who don’t usually accept films with too much graphic content. However, several “nongraphic” U.S. horror films, such as John Krasinski’s “A Quiet Place” and Blumhouse’s “Happy Death Day,” have scored China releases, with “A Quiet Place” earning a respectable $33.7 million at the Chinese box office.
Hollywood director and producer J.J. Abrams’ production company, Bad Robot, has signed a deal with Chinese tech giant Tencent to develop a new gaming division called Bad Robot Games. Tencent holds ownership interests in such leading gaming companies as Riot Games and Supercell, developers of “League of Legends” and “Clash of Clans,” respectively.
The gaming partnership will team up with traditional game developers to create both large and small-scale original projects for mobile, PC and console. Bad Robot will leverage its “world-building and storytelling expertise,” as well as its in-house creative directors and network of visual artists and other talent, to develop original games.