SC to regulate digital assets


Good move: Lim says many people have bypassed Malaysia because the policy was not clear about digital assets

Move seen to spur growth in digital currency sector

Regulatory oversight of digital currencies and tokens, which kicks in from today, offers timely clarity and transparency to various players in the fledgling industry.

Omni Capital Partners Sdn Bhd managing director Scott Lim said everything would be above board with the regulation and governance under the Securities Commission (SC).

“Digital assets in Malaysia have been underwhelmed mostly. A lot of people have been bypassing Malaysia because the policy was not clear about it.

“Certainly, now that this is regulated by the SC, it’ll be good. We shall wait for the guidelines,” he said.

Celebrus Advisory co-founder Edmund Yong said the regulation is very much welcomed and one which is needed, as it would spur growth in the industry.

Celebrus is a compliance-first blockchain consultancy firm.

He added that the statement by the Finance Ministry was very accommodative with the intention to use tokens and the recognition of it as a fund-raising tool.

“In fact, it can be an indirect source of foreign direct investment, a borderless method to raise funds.

“But from now until March 31, there will be a twilight period. Many activities will be stopped in their tracks because they don’t know where they stand.

“Some would possibly even move offshore because of the draconian RM10mil and 10-year imprisonment punishment,” said Yong.

He said digital tokens could also be for points in computer games or reward points, and it too would be quite draconian if it is all painted with the same brush.

The Capital Markets and Services (Prescription of Securities) (Digital Currency and Digital Token) Order 2019 kicks in today and any person operating unauthorised initial coin offerings (ICOs) or digital asset exchanges faces up to a 10-year jail term and up to a RM10mil fine.

Digital currencies and digital tokens are collectively known as digital assets, which will now be prescribed as securities.

The SC is putting in place relevant regulatory requirements for the issuance of ICOs and the trading of digital assets at digital asset exchanges in the country.

This is expected to be launched by the end of the first quarter this year.

Finance Minister Lim Guan Eng said the offering of such instruments, as well as its associated activities, would require authorisation from the SC and needed to comply with relevant securities law and regulations.

“The Finance Ministry views digital assets as well as its underlying blockchain technologies as having the potential to bring about innovation in both old and new industries.

“In particular, we believe digital assets have a role to play as an alternative fund-raising avenue for entrepreneurs and new businesses, and as an alternative asset class for investors,” he said in a statement yesterday.

Any person offering an ICO or operating a digital asset exchange without the SC’s approval will face an imprisonment term not exceeding 10 years and a fine not exceeding RM10mil.

Federal Territories Minister Khalid Samad mooted the idea of the Harapan Coin last year, which would be the world’s first political fund-raising platform using blockchain and cryptocurrency technology.

In November last year, shareholders of Country Heights Holdings Bhd approved the company’s plan to conduct an ICO to issue its own cryptocurrency, called “horse currency”.

Country Heights founder and chairman Tan Sri Lee Kim Yew had said that the company would like to be the first to launch cryptocurrency in the country when the regulations are ready.

The company’s plan is to eventually issue one billion horse currencies backed by RM2bil worth of physical assets held by the holding company, with an initial 300 million open to the public for circulation.

StarBizBy ROYCE TAN roycetan@thestar.com.my

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Guan Eng: SC to regulate digital currencies starting tomorrow 

 


Securities Commission to regulate offering and trading of digital assets ..

 



SC to Regulate Offer & Trade of Digital Asset | Focus Malaysia

 


SC to regulate cryptocurrencies from tomorrow | Free Malaysia Today


 

BNM, SC say drawing up rules on digital assets | Money | Malay Mail

 

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Startup opportunities abound


Band together: Entrepreneurs are urged to build strong communities to have a bigger voice that will enable them to affect policy that is beneficial to the industry.
Local startup sector gaining ground with stronger investor interest

THE past few years have seen an increase of entrepreneurs in the local tech startup sector. With better access to funding, there is ample opportunity for new business ideas to take off.

But while the number of startups in Malaysia has increased, industry observers say we are merely scratching the surface of where the industry could be.

According to Yusuf Jaffar, programme manager of Global Accelerator Programme from Malaysian Global Innovation & Creativity Centre (MaGIC), there is an estimate of 3,000 startups in Malaysia. Compared to the over 1 million registered enterprises here, startups make up only 0.25% of total companies registered.

In contrast, Singapore has 42,000 startups, making up some 8.88% of companies in the island state.

In the region, South Korea has an estimated 30,000 startups, while Indonesia and India has over 4,700 and 7,700 respectively.

Although the numbers in Indonesia and India look low, Yusuf points out that they have a vibrant startup ecosystem.

“India has 1,200 new startups every year, and this does not include the ones that are failing. These are the ones that are surviving or thriving. This shows vibrancy of ecosystem.

Getting there: Hall says Malaysia’s startup ecosystem is rapidly maturing. 
Getting there: Hall says Malaysia’s startup ecosystem is rapidly maturing.

“For Malaysia’s ecosystem to grow, we need to rapidly increase our number of startups. We need more entrepreneurs here and we need more ideas,” he says.

He names four components that are needed for the industry to grow – more startups, capital, markets and talent.

In terms of capital, Yusuf notes that venture capital (VC) penetration in Malaysia is relatively high with 110 VC firms. Statistically, he says, there are a lot of funds available in Malaysia with US$1.75bil in VC funding for the local ecosystem, of which, only 50% has been spent to-date.

However, most of these funds go into funding Series A (US$1mil-US$3mil) and B (US$3mil-US$10mil) rounds, whereby the startups have grown sizably.

According to statistics, only 0.89% of VC capital went into early-stage investment, which amounted to about eight investments last year. In Singapore, 67% of VC funding goes to the early stage.

It is crucial to have adequate funding for early stage investment to ensure that entrepreneurs can tap these funds to grow their ideas.

“We are investing late,” says Yusuf.

In Malaysia, he estimates that the success rate for startups is 20%.

He adds that 90% of the current 242 unicorns – startup company valued at over US$1bil – in the world received VC funding from the get-go, underscoring the importance of VCs in making high-growth companies.

Additionally, the frequency of investments in the local market is low. In 2017, there were only 77 investments made by VCs, or only 2.57% of startups received VC investment. Considering that there are 110 VC firms here, it is small wonder that entrepreneurs feel that there is a lack of funding available in the local market.

Stacking up regionally

Malaysia has often been cited as a country with great potential. We have a fairly well-educated population, infrastructure and a strong economy.

However, the other countries in the region have somehow garnered more interest from investors. Singapore and Indonesia, in particular, have been receiving sizeable investments from VCs. The Indochina region has also been getting a lot of attention in recent times.

And not many from the industry will forget that Malaysia-founded Grab eventually moved to Singapore given the more vibrant ecosystem across the straits.

But Justin Hall, partner at Singapore-based Golden Gate Ventures, says that Malaysia’s startup ecosystem is rapidly maturing.

“As we’re starting to see in other regional countries, Malaysian entrepreneurs are actively seeking to build out platforms and products that appeal to the entire South-East Asia, and not simply the domestic Malaysian market.

“Regional funds are actively looking for and investing in Malaysian-born startups, and I see this trend accelerating as investors look out from Indonesia and Singapore,” says Hall.

Last November, Golden Gate launched its Malaysian office in Kuala Lumpur to solidify its presence here. The firm had already utilised a quarter of its Fund II to invest in early-stage tech companies that are based or operating in Malaysia. It is planning to invest a further RM75mil in Malaysia-based startups.

 Smart capital: Ganesh notes that VCs can now pick and choose their investments because there are more startups around. — Bernama
Smart capital: Ganesh notes that VCs can now pick and choose their investments because there are more startups around. — Bernama 

He notes that Malaysia also has a large digital consumer market.

“It bears some striking similarities to other South-East Asian countries in terms of consumptive behaviour such as regulatory bottlenecks in certain industries, and regulatory, infrastructure, and logistical constraints. This means that products and services that resonate with Malaysian consumers and businesses might be easier to localise into other regional markets than, say, companies that specifically appeal to Singaporeans,” he adds.

Hall opines that Malaysian companies are undervalued compared to Indonesia and Singapore, largely due to the sheer amount of capital being invested in the later markets. There were previously also some gaps in founder experience and capability between the markets, but that gap is rapidly closing.

According to Hall, logistics and supply-chain focused startups will come into focus in 2019 as the e-commerce boom starts sizing up in the region.

“We are really only scratching the surface of scalable, efficient, inter-country logistics and supply-chain platforms. We hope to continue finding and investing in the best, most talented entrepreneurs in South-East Asia this year,” he says.

However, Commerce DotAsia Ventures Sdn Bhd executive chairman Ganesh Kumar Bangah notes that the startup frenzy in the region seen a few years ago has cooled off.

“Valuations were very high three to four years ago. I think it has cooled off. There are still some startups who ask for crazy valuations, but they don’t get funded. VCs can now pick and choose because there are so many startups. They don’t compete with each other as much as before.

“It is not like three or four years ago, where a startup can say, ‘if you don’t give me this value, the next guy who comes in will offer me that’. Today, there’s realism in the game.

“There is still a lot of money in the region for the right companies. People are less willing to overpay for them,” he says.

Building the ecosystem

Governments play an important role in developing the startup ecosystem and in creating new markets for the ecosystem.

Yusuf says favourable policy can mobilise funds and help grow the industry.

He cites the example of Singapore, which has allocated S$5bil in matching grants for startups, effectively pouring in S$10bil for the sector. In the US, some US$84bil is invested into VCs annually, with the bulk of these funds coming from pension funds.

Obviously, the funding ecosystem in Malaysia has a long way to go. But developments in the local market such as equity crowdfunding and Leap Market have opened up more funding avenues for startups looking to tap new money. Additionally, more people have shown interest in becoming angel investors, which would help fill the gap in the early-stage financing.

“It is not that there is not enough money in the ecosystem. The case is, there’s not enough intelligent capital at the early stage here. Intelligent money means that these investors have the knowledge to value the startups, and have the ability to give them the add-ons to help them grow.

“We don’t lack capital, we lack intelligent capital at the early stage. We’ve got a lot of people with money and a lot of them want to invest in technology but don’t know how,” notes Ganesh.

Yusuf concurs. The Malaysian ecosystem lacks specialist talents who can run funds. Most of the local VCs are managed by generalists who may not be able to discern startup-specific issues and challenges.

 Paving the way: Governments can play an effective role in creating new markets for the ecosystem.
Paving the way: Governments can play an effective role in creating new markets for the ecosystem. 

Thus, there is a need to attract more foreign funding and talent to close the gap in the local market.

“Governments also play a big role in market creation. The government needs to put in real money into these specific markets.

“A good example is the “buy social” campaign in the UK where all government procurement contracts have to go to social enterprises. That has led to the UK becoming the epicentre of social enterprises in the world, because the government made that effort and made that pledge.

“So it’s not just about identifying a market, but creating real value in the market. There’s no way an entrepreneur can grow unless the market is created,” says Yusuf.

He notes that 5% of the UK’s GDP now comes from social enterprises.

Yusuf also urges entrepreneurs themselves to be part of the effort in building the local startup ecosystem by creating communities that will enable them to work outside their silos. By working within communities, entrepreneurs will be able to share ideas and collaborate to form better solutions and business models.

“We need to have clusters, where you can get matching of skillset and vision. And these clusters should be connected to other clusters to see how you can build the ecosystem and move the ecosystem forward.

“So build the community. And the importance of building a bigger community is so that you can affect policy in a way that will benefit the industry,” he says.

By joy lee Starbiz

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New allegations on 1MDB scandal: More clarity still needed


Story behind the story: Wright and his ‘Billion Dollar Whale’ co-author Hope have published new allegations on 1MDB but the anonymity of their sources could compromise their credibility.

Nothing should be assumed too easily about even an established scandal like 1MDB, certainly not guilt or culpability, if sound investigations and public confidence are not to be prejudiced.


JUST when everyone seemed inured to shocking details about 1MDB, Wall Street Journal (WSJ) reporters appeared to have come up with more.

Investigative reporters Tom Wright and Bradley Hope, who covered 1MDB issues before, made additional claims last Monday that would be shocking if proven true.

They say that upon the initiative of Malaysian authorities, China offered to bail out 1MDB’s debts or losses in exchange for Malaysia’s support for China’s Belt and Road Initiative (BRI) projects.

These projects were further said to have come at inflated costs, were acknowledged as unprofitable, and lacked transparency in their implications.

Wright and Hope say their information came from the minutes of “secret meetings” between Malaysian and Chinese officials and the personal testimony of some Malaysian officials past and present.

The authors could have been more transparent about their sources and on the content of their revelations, but apparently not.

Countries do sometimes engage in such intrigue, but nonetheless it is always easier to allege than to verify. Serious allegations such as these require equally serious substantiation.

The gist of the claims had been troubling thoughtful Malaysians, yet few expected it to take such form. Not without reason, doubts linger about the details and accuracy of these claims among all parties.

Even when current government officials could have made political capital by weighing in, making the former government’s alleged actions seem nastier, they refrained from it.

Formal meetings between government officials of two countries are routinely confidential and therefore “secret”, so there is nothing particularly sinister about their unreported nature.

There is also doubt about the minutes of meetings containing compromising information. Some meetings were said to be in China where Malaysian officials visited, yet the hosts freely permitted the visitors to go home with the recorded minutes of potentially explosive discussions.

The WSJ’s story has present and former Malaysian officials informing it about a supposedly secretive pact between Malaysia and China, yet senior Malaysian officials both past and present know nothing about it. Both sets of Malaysian officials are genuinely concerned and seriously want to know. Yet it is said that some Malaysian officials already knew, had known for more than half a year since last May, and who preferred to tell all to the WSJ only now rather than to their colleagues or the media earlier.

The media at the time also did not know, neither Malaysiakini, Sarawak Report, nor any other that was actively covering the issues, despite a freer news environment after last May’s election that encouraged whistleblowing and exposés.

For the kinds of sources said to have been used for the WSJ story – minutes of several meetings, and the testimonies of officials – the substantiation has been rather lean.

In its January 7 report of just 1,703 words, only two dates (June 28 and September 22, 2016) have been mentioned for the meetings. Two Chinese officials had been named at the meetings but not any Malaysian.

Xiao Yaqing, Chairman of the State-owned Assets Supervision and Administration Commission, is quoted as stressing the importance of one particular meeting but nothing else.

Sun Lijun, “head of China’s domestic security force,” is cited as mentioning his agency’s capacity in conducting surveillance on parties inimical to Malaysia’s previous government, but nothing about what Malaysia is supposed to do in return.

Each of the two named persons had only part of a story to tell, with nothing to substantiate the larger claims made by the WSJ’s reporters. There is nothing definitive like a “smoking gun” to back those claims.

No Malaysian official at any of the meetings has been named or quoted, not even in reported speech. For many observers that seems odd, particularly where deals were supposedly agreed between two sides.

Malaysia is also supposed to have agreed to BRI projects only when China offered to bail out 1MDB. That presumption seems somewhat stilted.

Later in the story, former Prime Minister Datuk Seri Najib Tun Razak is said in reported speech to have voiced support for “China’s position in the South China Sea during a regional summit in Laos.”

Najib’s Government may have been quiet on China’s sweeping maritime territorial claims, it was certainly less vocal than Vietnam or the Philippines on the dispute, but nowhere can it be said that it supported China’s position in the South China Sea.

And an Asean summit would have been the last place such a thing could have happened, even if it ever did. The WSJ story also claims that China had offered Malaysia its influence in stopping US investigations into 1MDB and Malaysian leaders at the time.

Given the highly competitive China-US relationship, particularly in third countries, what possible “influence” could China really have on the US in stopping investigations into allegedly shady deals involving China?

For many observers, the US would have had every incentive to proceed with such investigations, the more so when China appeared to be apprehensive about them.

It would be utterly foolish for any Chinese official to think there is such influence, and totally naïve for any Malaysian official to believe it. The same seems to apply to readers of the WSJ story.

The story behind the story is that the documents such as the minutes of meetings had been discovered in official files left behind by the previous Government after it had vacated official premises following its election defeat.

Again, many would doubt that the ousted officials had taken all possibly incriminating material with them as they left, except for these highly revealing documents.

The new Pakatan Harapan leaders had also been slow in taking office, first with the delayed swearing-in ceremony of the new Prime Minister and then in the phased nature of ministerial appointments.

Yet despite these delays, it is said that the departing Barisan Nasional leaders still did not retrieve the documents that could be used against them.

The WSJ sources rest on the what (documented minutes) and even more on the who (Malaysian officials who provided the minutes, and those who testified to it).

All of these officials are persons unknown or unnamed. Anonymity sometimes accords legitimate protection, but not now when it only compromises their credibility.

When serious allegations are levelled against one party or another, in this case against both Chinese and former Malaysian officials, some vested political interests of someone somewhere could be served.

It has also been implied that other “secret talks” had led to Malaysia’s readiness for Chinese naval vessels to dock in Malaysian ports.

But to a non-aligned country, the docking of vessels from friendly nations for supplies and refuelling should not be an issue – certainly not an issue requiring the seal of approval from secret negotiations.

Sarawak Report, which initially gave 1MDB information to several newspapers including WSJ, has since complained about some of its methods.

The WSJ has done very good work on 1MDB investigations and similar stories before, and it will most certainly do so again.

Najib and Jho Low have meanwhile rejected the latest WSJ story as expected, but others also have their doubts.

To get to the truth behind hazy intrigues, both clarity and credibility are essential at every stage. That has yet to happen consistently with 1MDB coverage.

Behind The Headlines by Bunn Nagara The Star

Bunn Nagara is a Senior Fellow at the Institute of Strategic and International Studies (ISIS) Malaysia.

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Pushing blockchain revolution


(From left) World of Sharing business development manager Ice Wong, EUNEX (Asia) marketing director Kyan Lee, MBAEX chief executive officer Sebastian Ionut Diaconu, Lim, International Blockchain Research Club vice-president Sunny Chao and blockchain technology company Milletique OTO Distribution senior manager Jasmond Ng posing at Fintech Blockchain Summit in Kulim, Kedah

OVER 2,000 blockchain enthusiasts and leaders shared the latest ideas at Fintech Blockchain Summit which was held in Kulim, Kedah.

The summit themed ‘Blockchain Era, Connecting Future’ explored the potential of blockchain technology in various economic fields.

Delegates discussed blockchain trends and evolution to various platforms and digital assets.

Held at MBI Desaku Multi-function Convention Centre, the summit was jointly organised by World Crypto Organisation, Makefamous Creative Hub Sdn Bhd, Milletique OTO Distribution Sdn Bhd, Mightficent Global Sdn Bhd, Menbridges Academy Sdn Bhd and Macsintec Social Media Sdn Bhd.

Among those attending the summit was Super Minor Community vice-president Nicholas Lim who is also Chainverses magazine chief editor.

“Various groups joined us at the summit to contribute to the progression of financial technology through discussions and sharing sessions.

“We hope this summit will open up greater opportunities for development,” Lim said.

Lim opined that blockchain had good concepts and ideas.

However, he said the biggest resistance in the current blockchain development was the lack of economic support in terms of adoption.

“To overcome this, we need teamwork, good practical solutions and support from the community to push the adoption of blockchain in the country forward,” he added.

During the summit, four groups signed an MoU, including International Financial Technology Academy, Linton University College, Milletique Technology and Menbridges Academy.

The MoU aimed to promote blockchain financial technology through education with the hope of cultivating more blockchain experts in the future.

By emilia ismail The Star


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Huawei unveils server chipset as China cuts reliance on imports


New chip: A Kunpeng 920 chip is displayed during an unveiling ceremony in Shenzhen. Huawei is seeking growth avenues in cloud computing and enterprise services. — AP

HONG KONG: Huawei Technologies Co Ltd has launched a new chipset for use in servers, at a time when China is pushing to enhance its chip-making capabilities and reduce its heavy reliance on imports, especially from the United States.

Huawei, which gets the bulk of its revenue from the sale of telecommunications equipment and smartphones, is seeking growth avenues in cloud computing and enterprise services as its equipment business comes under increased scrutiny in the West amid worries about Chinese government influence over the firm.

Huawei has repeatedly denied any such influence.

Chinese firms are also seeking to minimise the impact of a trade dispute that has seen China and the United States slap tariffs on each other’s technology imports.

For Huawei, the launch of the chipset – called the Kunpeng 920 and designed by subsidiary HiSilicon – boosts its credentials as a semiconductor designer, although the company said it had no intention of becoming solely a chip firm.

“It is part of our system solution and cloud servicing for clients. We will never make our chipset business a standalone business,” said Ai Wei, who is in charge of strategic planning for Huawei’s chipsets and hardware technology.

The Shenzhen-based company already makes the Kirin series of smartphone chips used in its high-end phones, and the Ascend series of chipsets for artificial intelligence computing launched in October.

It said its latest seven nanometre, 64-core central processing unit (CPU) would provide much higher computing performance for data centres and slash power consumption.

It is based on the architecture of British chip design firm ARM – owned by Japan’s SoftBank Group Corp – which is seeking to challenge the dominance in server CPUs of US maker Intel Corp.

Huawei aims to drive the development of the ARM ecosystem, said chief marketing officer William Xu. He said the chip has “unique advantages in performance and power consumption”.

Xu also said Huawei would continue its “long-term strategic partnership” with Intel.

Huawei’s new ARM-based CPU is not a competitor to the US company’s x86 CPUs and servers, but complementary, Xu added. Redfox Qiu, president of the intelligent computing business department at Huawei, said the company shipped 900,000 units of servers in 2018, versus 77,000 in 2012 when it started.

Huawei was seeing “good momentum for the server business in Europe and Asia Pacific” and expects the contribution from its international business to continue to rise, Qiu added.

Huawei also released its TaiShan series of servers powered by the new chipset, built for big data, distributed storage and ARM native applications.

The firm founded chip designer HiSilicon in 2004 to help reduce its reliance on imports.

In modem chips, Huawei internally sources 54% of those in its own devices, with 22% coming from Qualcomm Inc and the remainder from elsewhere, evidence presented at an antitrust trial for Qualcomm showed. — Reuters

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Apple faces brewing storm of challenges


Shrinking share: People walk outside an Apple store in Beijing. Apple’s market share in China in the third quarter of 2018 was around 9, and has dipped from above 14 in 2015, overtaken by local rivals like Huawei, Oppo and Vivo. — Reuters

Video: 5G …https://www.youtube-nocookie.com/embed/iJfCBqPUKHQ

 

SHANGHAI: Apple Inc’s chief executive Tim Cook has his work cut out in China this year: the iPhone maker faces the looming threat of a court-ordered sales ban, the uncertain outcome of trade war talks and the roll-out of a new 5G network, where it finds itself behind rivals like Huawei and Samsung.

The complex outlook raises a challenge for Apple as it looks to revive its China fortunes after weakness there sparked a rare drop in its global sales forecast, knocked US$75bil from its market valuation and roiled global markets.

Cook told investors that the main drag on the firm’s performance in China had been a sharper-than-expected slowdown in the country’s economy, exacerbated by the impact of trade tensions between Washington and Beijing.

“We did not foresee the magnitude of the economic deceleration, particularly in Greater China,” he said.

Chinese shoppers told Reuters another element had been key: the high price-tag on Apple’s flagship phones.

Analysts said the firm faced a brewing storm of challenges: an economic slowdown, stronger rivals like Huawei Technologies Co Ltd bringing out comparable tech at lower prices and bubbling patriotic sentiment amid the trade war.

A Chinese court has also issued a preliminary injunction banning some Apple phones, part of a legal battle with chip maker Qualcomm Inc. This ban, potentially hitting iPhone models from the 6S through the X, has yet to be enforced.

Last Thursday a local industry body, the China Anti-Infringement and Anti-Counterfeit Innovation Strategic Alliance, called on Apple to heed the court order and not “trample the Chinese law by leveraging its super economic power and clout.” Apple declined to comment on the group’s statement but has previously said it believed its current phones complied with the Chinese court’s order.

“These are tough times for Apple in China,” said Neil Shah, research director at Counterpoint, adding the iPhone could see its market share slip to 7% this year in the face of stronger local rivals and worry about the sales ban.

Apple’s market share in the third-quarter of 2018 was around 9%, and has dipped from above 14% in 2015, overtaken by local rivals like Huawei, Oppo and Vivo.

Another question mark for Apple is its 5G strategy in China, where the US firm is not expected to have a 5G-enabled phone until 2020, behind rivals like Huawei, Xiaomi Corp and Samsung Electronics.

China is looking to push ahead with its rollout of a faster 5G network, with a pre-commercial phase this year and a commercial network in 2020.

Some are looking to make an early bet on the technology.

Huawei is planning a 5G phone mid-year, while Xiaomi is aiming for the third quarter. Samsung is expected to unveil a 5G phone in the first half of the year.

Industry insiders, however, said Apple would likely hold off until the fall of 2020 to have its own 5G-enabled phone, a strategy that would bypass the untested early period of the technology, but which could mean Chinese shoppers delay iPhone purchases or buy another brand that switched to 5G earlier.

“I’ll definitely be paying attention to 5G functionality when I buy my next phone,” said Wu Chengjun, a graduate student in Beijing who currently uses an iPhone X.

With the exception of Huawei, which makes it own 5G chips, Qualcomm is providing the technology to many of the major phone makers releasing 5G handsets this year.

“If you’re a (phone maker) looking for a ‘super cycle’ (of sales), if you don’t have 5G, your situation won’t get any better,” Cristiano Amon, Qualcomm’s president, told Reuters in an interview. ”

The carrier channel is going to be incentivised to start selling 5G phones in the second half of 2019, he said. — Reuters

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US President Donald Trump discards staff like changing shirts and reverses policies without any forewarnings to staff or supporters alik..

2019 – Tthe rise of the quantum era


US President Donald Trump discards staff like changing shirts and reverses policies without any forewarnings to staff or supporters alike. This behaviour is described by Armenian President Sarkissian, a quantum physicist-turned-politician, as quantum politics. afp –  

THE year 2018 was an exhausting one, but it marked the exhaustion of the old neo-liberal order, willingly dismantled by President Donald Trump to the aghast of friends and foes alike.

We seem to live at the edge of chaos, in which every dawn is broken by tweets that disrupt the status quo. There are no anchors of stability. Trump discarded staff like changing shirts, and reversed policies without any forewarnings to staff or supporters alike.

This behaviour was described by Armenian President Armen Vardani Sarkissian, a quantum physicist turned politician, as quantum politics.

Most of us use the term quantum to mean anything that we cannot understand. The reason why we find quantum concepts weird is that they do not conform with normal logic. As Italian physicist Carlo Rovelli explains it, “Reality is not what it seems”.

Human beings live at the macroscopic scale, which we observe from daily life. We like stability and order. But at the beginning of the 20th century, Albert Einstein and Nils Bohr changed the way physicists thought about how nature behaved. Quantum physics evolved from the study of the behaviour of atoms at the microscopic scale.

Order is only one phase in the process of evolution.

And since the 1980s, quantum science has expanded beyond physics to neuro-science, information computing, cryptography and causal modelling, with great practical success.

Like the iPhone, most people don’t know how it works, but quantum mechanics does work in practice.

The first quantum concept is that it is probablistic, not deterministic. In simple language, there is no such thing as certainty, which classical science, religion and our normal instincts teach us to believe. In the beautiful language of Rovelli, “quantum fields draw space, time, matter and light, exchanging information between one event or another. Reality is a network of granular events, the dynamic which connects them is probabilistic; between one event and another, space, time, matter and energy melt in a cloud of probability.”

Second, Bohr defined a dualistic property of quantum situations called complementarity. Light is both a particle and wave, not either/or. This concept of complementarity leads to the famous Heisenberg’s uncertainty principle, which basically says that the position and velocity of an object cannot both be measured exactly and simultaneously, even in theory. If everything in the world comprises atoms and photons moving constantly, nothing can be measured exactly – the principle of indeterminacy.

The third concept is relational, in that everything is related to something. There are no absolutes, just as there is no certainty. Everything exists relative to something else. Quantum entanglement occurs when pairs or groups of particles interact with each other so that the quantum state of each particle is somehow related to the state of the other(s), even across great distances.

This phenomenon is popularly called the butterfly effect, which dramatically says that a butterfly flapping its wings may cause a typhoon across the Pacific. Einstein called entanglement “Spooky Action at a Distance”, and he tried hard to disprove it. But these effects were empirically verified in the 1970s.

Quantum physics is moving to centre stage because quantum information theory led to the invention of quantum computing. Until recently conventional computers use binary “bits” (one and zero) as the process for calculation of information. But a quantum computer uses quantum bits, called qubits, which can exist in both states simultaneously, and in so doing, it can process information faster and more securely than conventional computers.

This breakthrough means that quantum computing will transform artificial intelligence, deep learning and advance technology at speed, scale and scope that rivals anything we have witnessed in the world of classical computing. The goldmine of quantum computing is going to make fortunes for everyone, but he who controls the infrastructure (or pipes) across which quantum computing will be conducted will be the big winner.

Information Age

In the Information Age, knowledge, technology and knowhow is more valuable than gold. Central bank monetary creation as well as cyber-currencies like bitcoin, are quantum money, because the marginal cost of production of such “money” is near zero.

We are all so dazzled by such marvellous creation that many investors moved into the alchemy of asset price bubbles. It is no coincidence that the South Sea and Tulip bubbles occurred in an era of great “displacement”, when 17th century investors (including Isaac Newton) had no clue how to price massive returns from new companies colonising the South Seas, or the technological rarity of creating a black tulip.

In qubit terms, hard assets and soft/virtual liabilities are quantumly entangled with each other. If you can generate quantum liabilities at near zero cost, you can control and increase real assets to the disadvantage of your competitors. Put crudely, with a quantum computer and deep learning, you might be able to generate a drone-sized nuclear bomb using 3D printing at very low cost.

Or even more bluntly, you can do this under quantum encryption that the incumbent powers do not even know what you are doing.

It is therefore no coincidence, that the Western Deep States moved quickly against Chinese enterprises ZTE and Huawei, because these two have been big developers and users of quantum computing. First, deprive the competitor from access to the key high-tech fast chips that enable quantum computing to perform at speed. Second, disrupt the management and key talent that would enable such quantum capacity to be operationalised. Third, prevent them acquiring market share to an entrenched level, so that you have time to bring your own technology up to speed.

All these suggest that if you think in Thucydides Trap terms (classical arms race to nuclear war), we will all end up in nuclear mutual destruction.

If quantum thinking is a more “natural” way of thinking about our physical world and human behaviour (since our brains appear to neurologically work in quantum terms), then it means that we need to get rid of old classical thinking and mental traps. The real challenges to global prosperity and survival are climate change, social injustice, corruption, crime and disruptive technology, but mostly outdated mindsets. We need to think through these challenges in quantum terms, which means very new and weird ways of thinking round these obstacles.

Discarding old mindsets is never easy. But mankind has always thrived on getting new solutions to old problems, perhaps this time through a quantum frame of mind. On that optimistic note,

Happy New Year to all!

By Andrew Sheng – Think Asian– Tan Sri Andrew Sheng writes on global issues from an Asian perspective.

Related:

The photo shows electronics for use in a quantum computer in the quantum computing lab. Describing the inner workings of a quantum computer isn’t easy, even for top scholars. — AP











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