China top internet firms pump 45% more into R&D

Asia’s largest spender in technologyChina’s top 100 internet companies have increased their investment in research and development (R&D) activities, spending 153.87 billion yuan (US$21.85 billion) last year. This marks the highest collective spend by the group, to date, and a 45.1% climb from 2017, according to stats released by the Internet Society of China, which is affiliated with the Ministry of Industry and Information Technology (MIIT). 

On average, the country’s top 100 internet companies 10% of their revenue for R&D, with four in the pack slicing off 30% to 35% for such initiatives, reported state-run media China Daily. Led by Alibaba Group, the group includes Tencent and Baidu–which are second and third, respectively–but also comprises Alibaba’s subsidiary Ant Financial. 

Alibaba takes more cloud products global, eyes APAC growth

Alibaba takes more cloud products global, eyes APAC growth

Chinese internet giant talks up new product releases such as Anti-Bot Service and its datacentre footprint in Asia-Pacific as key differentiators against cloud rivals, Amazon Web Services and Google. Its machine learning specialist also urges need for governments looking to build smart cities, such as Singapore, to ensure its citizens benefit from such initiatives.

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Together, the top 100 have secured almost 80,000 patents. These companies are assessed based on various criteria including revenue, profit, innovation, social influence, and corporate responsibility. 

Jiao Xulu, who is an official with the MIIT, said local internet companies showed “intensified efforts” in driving innovation and were emerging in areas such as cloud computing, big data, and artificial intelligence (AI). 

Chief engineer at the ministry Zhang Feng concurred, adding that the top 100 companies would see continued revenue growth this year as online technologies becoming crucial components of China’s digital economy. 

Zhang said: “Th internet will effectively promote supply-side reforms, optimise industrial structure, enhance efficiency, and help widen imports and exports.”

The top 100 companies last year collectively clocked revenues worth 2.75 trillion yuan (US$390.52 billion), up about 1 trillion (US$142.01 billion) from 2017.

China’s internet market expanded 17.9% in the first half of 2019 and currently supports 830 million users. 

Alibaba last year said it was aiming to serve 2 billion consumers and 10 million businesses by 2036. In its latest quarterly earnings, its cloud revenue hit US$1.13 billion and accounted for 7% of overall sales. 

China is expected to remain Asia’s largest spender in technology, forking out US$256 billion this year and US$273 billion in 2020, and lead global markets in 5G where the country’s investments in telecommunications account for 57% of its overall tech expenditure. It outspent the US by US$24 billion in 5G since 2015, with its three major telcos unveiling plans to launch commercial 5G networks by next year, according to Forrester. 

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China to lead APAC tech spend, 5G race ahead of global markets

China will remain Asia’s largest in terms of tech spending, growing 4 percent this year and 6 percent in 2020, and lead global markets in the 5G race where its investments in telecommunications account for 57 percent of the country’s overall spend.

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China netted the highest gains in the 2019 Asia Power Index. In cyber capability, it now almost matches the US and Russia. In renewable energy it dominates.

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Estimated to be worth US$53 billion by 2023, the Southeast Asian online retail market is the emerging battleground for Chinese tech giants–Alibaba, Baidu, Didi, JD.com, and Tencent–which have been investing aggressively in the region.

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The Chinese government is also inviting private entities and research institutions to join the development of key AI projects as the country aims to lead global AI races by 2030.

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Since the fourth quarter of 2018, many Chinese reports have suggested that major internet firms in the country are either scaling back or freezing hiring, or axing staff due to lukewarm growth and unfavourable prospects.

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