CBN丨Big techs need to deal with big dark “cloud” overhead

China Business Now李莹亮,见习记者张然 2021-11-24 19:28


Hi everyone. I’m Stephanie LI.


Coming up on today’s program.


  • China summons Alibaba and Baidu cloud units on fraud website access;

  • Ant Group will separate Huabei consumer brand from bank loan services;

  • RMB is gauging near record high against USD.

Here’s what you need to know about China in the past 24 hours 


China’s Ministry of Industry and Information Technology (MIIT) and the Ministry of Public Security have summoned Alibaba Cloud and Baidu Cloud, urging the two firms to carry out relevant work in preventing and managing fraud. This came as the latest move of China’s regulatory overhaul of big techs. 

The ministries reprimanded the two firms for linking to too many dubious websites, urging them to take the responsibility for abiding by China’s cyber security law and to rectify relevant issues within a specific time period. Those who refuse to conduct rectification will be punished severely.

Regulators are scaling up their efforts on industry supervision and the level of punishment, as the MIIT said it will work with the Ministry of Public Security to guide and urge internet firms to strictly carry out their safety responsibilities, and vowed to increase penalties for violations. 

Cloud service represent a big chunk of the two tech giants’ revenue, as in the September quarter, a 73 percent leap in AI cloud revenue buoyed Baidu's total revenue to reach 31.9 billion yuan. As for Alibaba, quarterly report showed that Alibaba Cloud grew 33 percent year-on-year to 20 billion yuan, recording profit of 396 million yuan. 

Both Alibaba Cloud and Baidu Cloud said they would strengthen management of website links, domain name registration and information services to fend off the risk of cyber fraud. Today, the Hang Seng Tech Index went down by 0.5 percent, with Alibaba dipping for six straight days to close 1.4 percent lower, while Baidu gained 0.9 percent.






Update on COVID-19


  • The Chinese mainland reported 4 new local cases yesterday, 2 from Liaoning and 2 from Yunnan.


Next on industry and company news


  • Chinese fintech giant Ant Group will begin separating its Huabei consumer brand from lending services provided by partners on its platform as it did with sister brand Jiebei. Huabei will become an exclusive brand of Ant Group to offer small-and-medium-sized loans, which is separated from credit services provided by its partner banks. 


  • Kuaishou's revenue increased 33 percent year-on-year to 20.5 billion yuan in the third quarter, defying China's tech crackdown and intensifying competition with ByteDance. The company recorded a net loss of 4.8 billion yuan, flat from last quarter. Its monthly active users rebounded to nearly 573 million, the biggest jump in 15 months. 


  • China’s Q&A community Zhihu has widened its net loss 145 percent to 269.8 million yuan in the third quarter from a year ago, despite solid revenue growth of 115 percent to 823.5 million yuan. US-listed stock price of the company lost 6.45 percent on Wednesday after surging 4 percent yesterday as its monthly active users exceeded 100 million for the first time ever. 


  • Chinese smartphone maker Xiaomi saw its third-quarter revenue rise just 8 percent to 78 billion yuan, while the adjusted net income rose 25 percent, significantly slower than the 87 percent growth in Q2. The Beijing-based company said Tuesday its global smartphone shipments reached 43.9 million despite components shortage during the period, ranking in third place.


  • The Cyberspace Administration of China (CAC) on Tuesday published a warning list of 88 artists who have allegedly violated the law or ethics, banning them from live-streaming in China. The list includes disgraced actors Kris Wu, Zheng Shuang and Zhang Zhehan.


Switching gears to the financial sector


  • Hainan Province will step up efforts to promote the testing and use of the digital yuan in cross-border trade and financial services as part of its development plan for the Hainan Free Trade Port, according to a five-year plan issued on Tuesday. 


  • The yuan is approaching its strongest level against trade partners’ currencies even as China’s central bank tries to slow its ascent with weaker-than-expected daily fixings. The Bloomberg replica of the CFETS RMB basket index rose 0.2 percent to 102.6044, nearing the record touched in August 2015. Yuan strengthens to 6.3903 against USD on Wednesday. 


Wrapping up with a quick look at the stock market


  • Chinese stocks closed mixed today as the new energy sector recorded loss, while textile and MetaVerse stocks led the gains. The Shanghai Composite went up 0.1 percent, while the Shenzhen Component lost 0.12 percent. The Hang Seng Index closed 0.14 percent higher, buoyed by stocks of electric utilities and e-cigarette.


Biz Word of the Day


  • Cloud Computing is the on-demand availability of computer system resources, especially data storage and computing power, without direct active management by the user.




Executive Editor: Sonia YU

Editor: LI Yanxia

Host: Stephanie LI

Writer: Stephanie LI, ZHANG Ran

Producer: XIANG Xiufang

Sound Editor: ZHANG Ran, Andy YUAN

Graphic Designer: ZHENG Wenjing, LIAO Wanni

Co-produced by 21st Century Business Herald Dept. of Overseas News & SFC Audio/Video Dept.

Presented by SFC

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(作者:李莹亮,见习记者张然 编辑:李艳霞)