华为不惧美国封杀 美式霸凌失道寡助!Huawei’s goodwill gesture being treated unscrupulously by the US !


https://youtu.be/hRv0QMEwdas

《今日关注》是CCTV中文国际频道播出的时事述评栏目。该栏目紧密跟踪国内外重大新闻事件,邀请国内外一流的专家和高级官员梳理新闻来龙去脉,评论新闻事件的影响和发展趋势。

中国财经报道》 任正非:美国政客低估华为的力量

任正非接受中央广播电视总台等媒体采访,任正非:美国政客低估华为的力量;摩根士丹利:美加征关税或致全球经济衰退;东航正式就波音737,MAX停飞损失向波音公司提出索赔。 《中国财经报道》原“整点财经”,联通全天频道财经资讯滚动递进式播出,形成频道财经资讯流。向受众提供即时国内国际财经新闻资讯,及时报道足以影响普通投资者重大利益的变化。

【栏目介绍】
离你最近的热点新闻,给你最快的新闻现场,予你最深的剖析解读,《今日亚洲》栏目携手亚洲30家强势媒体,独家资源、权威学者、专业制作,倾力打造亚太时事述评新闻高地。

#財經八點檔 #非凡貿易戰 #華為

【財經八點檔】暫緩禁令90天美國怕了?華為嗆沒意義 中國網友力挺:全面拋棄蘋果! 商用到軍用”大疆”好神!白宮盯上中國無人機巨頭控竊密│非凡新聞│20190521

首发!任正非最新回应:需要跟世界霸主较量!不需要90天临时执照!!!

专家批驳“美国重建中国论” 纯属荒谬说法 中国发展靠自己

Huawei products should not be linked to politics: Ren

U.S. ban not to affect Huawei’s high-end and 5G products: Ren

Huawei is a commercial company, and the use of its products is a choice for consumers based on their likes and should not be linked to politics, said Ren Zhengfei, founder and president of Huawei Technologies Co. Ltd. on Tuesday.

Ren made the remarks after the Bureau of Industry and Security (BIS) of the U.S. Department of Commerce put Huawei and its affiliates on an “Entity List,” which would restrict the sale or transfer of U.S. technologies to the company. The ban has triggered opposition from markets worldwide.

Huawei maintains mass production capacities for specific key components, including chips, and the U.S. ban will not result in negative business growth, Ren told reporters.

The telecommunications giant projected slower but positive growth this year.

Huawei posted a 39 percent year-on-year revenue growth in the first quarter of the year. The growth has slowed slightly in the second quarter, but the slowing will not hurt the company, Ren said.

“Huawei had made preparations for the extreme situations even before the Chinese Lunar New Year,” he said.

He noted, however, that it would not reject the U.S. supply chain, citing Huawei’s announced purchase of 50 million chips from Qualcomm in 2018.

“As long as the U.S. government allows U.S. companies to export the components, Huawei will continue to buy while sticking to its own research and development,” he said.

Ren said he appreciated the support of a large number of U.S. components suppliers over the years, and they are also lobbying for the easing of U.S. government-imposed restrictions.

He said Huawei is also in talks with companies like Google for potential remedy solutions, he said.

Source link

 

Read more: 

Ren’s mind-set fit to face down US

China can hardly make the US clear about all these issues. The only option for China is to do its own things well and accept the fact that the China-US trade war will last in the days that follow. As China becomes stronger, it will eventually see the US willing
to reflect upon itself.

Homegrown BeiDou system guarantees industry safety

The overall output value of China’s satellite navigation and positioning services industry reached 301.6 billion yuan ($43 billion) in 2018, up 18.3 percent on a year-on-year basis, with the country’s home-developed BeiDou satellite system contributing 80 percent to the core production value, reads an official white paper.

 

China launches new BeiDou navigation satellite

China sent a new satellite of the BeiDou Navigation Satellite System (BDS) into space from the Xichang Satellite Launch Center in Sichuan Province at 11:48 p.m. Friday.

 

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Steep learning curve


What is meant by “steep learning curve”?

Unfazed, this mass comm graduate overcame all kinds of challenges to make it in business.

SAMANTHA Mah did well on her first business venture but suffered a loss on her second. However, failure did not deter her and her two partners from moving on. They gave it another go until they could see the fruits of their labour.

Mah worked as a company administrator and voice talent for radio commercials before she decided to venture into business.— aNis aBdullah/The star

Mah’s first business received an investment of RM10,000 from her sister, Natasha, 37. She and two investor-partners started an online boutique targeted at young women. After one-and-a-half years, business picked up and was quite good.

Mah, 30, is the youngest in her family. She has two elder sisters and a brother.

Mah, Natasha and a friend Jason Leong, 31, started their trading company on March 8, 2011. Just four months later, it incurred a big loss, prompting them to change the products they were selling – from peanuts and sesame seeds to edible organic products.

A mass communication graduate from Universiti Tunku Abdul Rahman (UTAR) in Selangor, Mah had worked part-time as a company administrator and voice talent for radio commercials before she venturing into business. She is now the marketing manager/managing director of her company.

After starting Wide Tropism Trading, she passed her online boutique business to a friend.

One of the biggest challenges for Mah, at the beginning, was that neither she nor her partners had a corporate background.

“We handled matters based on our experiences. Sometimes we had to ask friends for advice.

“In the first few years, there were lots of arguments,” she said.

Mah is glad that her relationship with Natasha survived those trying times.

As part of the company’s costcutting measures, each of them had to take on more responsibilities in various departments.

“There were too many things on my plate – human resource, accounts, design and marketing – and I was suffocating. But we did not have enough (finances) to hire staff,” said Mah.

After two months, she “exploded” and cried during a meeting.

“I could not take the pressure and workload anymore,” she said.

Eventually, they could afford to hire new staff.

“Only then did things start to fall into place,” she said.


Cheated by a supplier

Initially, they were importing foods such as peanuts and sesame seeds, and distributing them to local suppliers. Unfortunately, they suffered a huge loss in the first year itself due to unscrupulous parties.

Due to limited cash flow, they could only import one container of stock at a time. Each time, they flew over to the exporting country, India, to check on the quality of the stock and witness the peanuts being loaded into the containers. The first two shipments went through successfully.

However, the third shipment, supposedly of Grade A peanuts, was discovered to contain Grade C stock instead, when it arrived.

She said: “No one in the market would accept the stock. We sought help from the local distributor to sell off the peanuts at a lower price but even then, no one wanted them. After trying for two months, we had to sell off the peanuts to a peanut butter factory at below cost. As a result, we ran into losses amounting to RM40,000.”

The supplier denied it was his fault and instead blamed others. They then contacted the High Commission of India, in Kuala Lumpur, for help but to no avail.

“We wondered how we were going to continue business. My father advised us to pick ourselves up, learn from it, and be more careful. Everyone was very supportive and encouraged us to continue. They believed we could do better,” she said.

Mah then sought help from her uncle, an experienced fruit trader and grocer. He advised her to run a business that’s less risky, such as repackaging and distributing organic products.

She and her business partners promptly took his advice.

In July 2011, her company had its first customer, a newly opened supermarket in Petaling Jaya. In two months, Mah’s team had designed the logo and sourced for products and packaging. And so, their label Love Earth was born.

 Overcoming obstacles

Every day, Mah and her partners packed their products until midnight, and delivered them, working on weekends to selfpromote their products as well.

Said Mah: “Each time a new supermarket called, we’d celeto brate!”

Gradually, it was time start their expansion plan but they were hampered by limited cash flow.

They knew they had to spend more to create brand awareness. That’s when they started their online webstore.

“None of us had any knowledge about marketing. So I attended marketing and e-commerce talks to learn and see what we could do,” she said.

Mah recalled: “The first three years of business were really tough. My salary was only RM1,000 monthly (to cut costs).”

But their efforts paid off. After five years of sheer hard work, they could buy two units of four-storey shophouses.

The company started with 50 products and now has 180.

Currently, it is distributing these products to over 500 outlets throughout Malaysia.


New priorities

Mah, who got married two years ago, plans to expand her family this year. Her husband, C.V. Loh, 32, distributes bio-degradable plates, lunch boxes and bowls as well as health supplements.

She said: “I hope to have financial freedom, and more time for my family. If possible, I would like to be a part-time businesswoman and full-time housewife one day.”

She plans to raise her children herself and not send them to a nanny. She also hopes to travel more in the future. Presently, she travels at least thrice a year. Seeing other countries and cultures opens up one’s mind, she said.

Although she is a career woman, Mah believes in putting family first.

“Women play a role in bringing up the family. If a child is not well taught, he might be a nuisance to society in the future. But if he has a good upbringing, he can be the sun that shines and brings benefits to all. Also, a woman is the pillar that upholds the family,” she said.

Mah explained that even though she studied mass communication and broadcasting, it was during her internship that she realised that she wanted to go on a different career path than she had originally planned.

After her graduation, she thought of going into volunteer work. But her uncle advised against it. He told her to be successful so that she could help herself and others in future.

By Majorie Chiew The Star
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Bytedance, World’s Most Valuable Startup Is Home to a Complex Fortune


US$13bil man: Zhang is the youngest self-made billionaire in Asia on the Bloomberg index, which tracks the world’s 500 richest people. He is worth US$13bil. — Bloomberg

  • Ownership structure used by Zhang Yiming is popular in tech
  • Chinese authorities will soon allow so-called VIEs to list

The 35-year-old founder of Bytedance Ltd. is worth about $13 billion, according to the Bloomberg Billionaires Index, making him China’s 9th-richest person and one of the fastest in modern times to amass a mega-fortune.

The business, founded in 2012, has more than 1 billion active monthly users across eight mobile apps, including a news aggregator powered by artificial intelligence and a video-sharing platform.

Zhang is the youngest self-made billionaire in Asia on the Bloomberg index, which tracks the world’s 500 richest people. His rapid wealth accumulation is a sign that China hasn’t lost its knack for creating mega-rich company founders despite a slowing economy.

His rapid wealth accumulation — he’s now the world’s 98th-richest person — is a sign that China hasn’t lost its knack for creating mega-rich company founders despite a slowing economy. It also helps explain why authorities seem to be taking a more tolerant stance toward a corporate structure favored by the country’s technology tycoons, most of whom have chosen to list their businesses overseas.

Zhang’s fortune is harder to calculate than the founders of Baidu Inc. and Tencent Holdings Ltd. in part because his company isn’t yet public. It’s also difficult because Bytedance is structured in the same way as the two tech behemoths — a complicated ownership system known as a variable interest entity (VIE).

Of the 44 Chinese tycoons on Bloomberg’s wealth index, eight are tech moguls with VIEs listed outside China. The billionaires’ combined net worth exceeded $150 billion as of March 21, and their stakes weren’t publicly known until the companies filed with regulators ahead of going public in New York or Hong Kong.

VIEs have never been formally endorsed by the Chinese government. But in an acknowledgment of their importance, officials will soon permit VIEs to go public in the country, allowing them to list on a new technology-focused exchange set to launch in coming months.

Complex Structure

Bytedance is, for now, a closely held VIE with a complex structure that involves layers of holding companies.

Its main business, Jinri Toutiao, is ultimately owned by Zhang and Bytedance Senior Vice President Zhang Lidong through a Beijing-registered holding firm, according to China’s National Enterprise Credit Information Publicity System.

Zhang pledged his 98.8 percent stake to another Beijing company, which in turn is owned by a Hong Kong-registered firm. That entity, where Zhang is a director, is owned by a company registered in the Cayman Islands. The principals won’t be disclosed unless there’s an IPO prospectus.

The Bloomberg Billionaires Index calculated Zhang’s net worth by pegging his stake at 65 percent and using the company’s valuation of $20 billion, a figure provided in 2017 by people with knowledge of the matter. The analysis assumes his stake has been diluted through funding rounds.

Bytedance is said to have secured a $75 billion valuation in late 2018, making it the world’s most valuable startup — though the figure isn’t used in the net worth calculation because the details haven’t been confirmed.

Yin Ai, a Bytedance spokeswoman, declined to comment on Zhang’s wealth or the ownership structure.

Zhang uses a VIE because Chinese regulations limit foreign investment across more than 30 sectors including the internet, telecommunications and education. The VIE structure — which allows offshore companies to control domestic Chinese businesses through contractual agreements — circumvents the rules and allows, for example, Baidu’s holding company to be based offshore (and list in the U.S.) while still being a dominant force in China.

Internet giant Sina Corp. pioneered the VIE model so that it could transfer income from onshore operating businesses to an offshore holding company, an arrangement that meant the Cayman Islands entity could list on the Nasdaq Stock Market in 2000.

There are risks to the structure for foreign investors, said Donald Clarke, a specialist in Chinese law at George Washington University.

“A contract entered into for an unlawful purpose is invalid under Chinese law,” he said. “Any time the government wants to pull the plug, it can.”

Still, that hasn’t stopped more than 100 companies using VIEs in offshore IPOs, according to research by Zhou Fang, a Beijing-based partner at law firm JunHe LLP, who predicts that more companies will follow.

That growth helps explain why authorities are slowly embracing VIEs. Earlier this month, China enacted a foreign-investment law that allayed investor concerns about the future of such companies, while unicorn VIEs will be able to list on the new exchange in Shanghai, known as the Tech Board.

“To some extent, it shows the government easing concerns over VIEs — but they still care about who’s the ultimate controller of the company,” said Zhang Biwang, a partner at Allbright Law Offices. As long as the controller of the company remains a Chinese citizen, “the government won’t shut their eyes and ignore reality to make the companies give up VIEs.”

ByBloomberg

Read more:

China tech firms, seeking passion and energy, promote younger staff
 https://www.reuters.com/article/us-china-tech-ageism/china-tech-firms-seeking-passion-and-energy-promote-younger-staff-idUSKCN1R60PS

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China’s private companies reaching for the stars


Lift-off: A security cordon is placed around the launch site of an OS-X suborbital rocket, which was developed by OneSpace Technology Group Co Ltd, in northwestern China last May. —China Daily
SATELLITES have become the latest gold mine or private companies in China as they rush to reach for the stars in the space sector.

The country’s satellite industry, which used to be dominated by state-owned enterprises, is gradually changing and opening to private players.

More than 90 Chinese start-ups, mostly focused on satellites or rockets, have taken their first steps in the space industry in the past four years, a senior industry expert from a Beijing-based satellite startup, who wished to remain anonymous, told China Daily based on the start-up’s internal research.

“It means that on average, nearly two startups were founded every month in the past four years in China. It is significant if China is to grab a slice of the cake from the global competition in the budding space industry,” he said.

According to The Space Report 2018 issued by The Space Foundation, the total market of the global space economy was US$384bil in 2017, a year-on-year increase of 7.4%. Of that, commercial activities accounted for more than 80%.

Industry experts pointed out that China only accounts for 3%-5% of the space economy globally, but the country is gaining ground fast in terms of both scale and technology.

Since 2014, Chinese authorities have launched policies and called for private players to actively participate in the country’s space industry.

Earlier, the National Development and Reform Commission, along with the Ministry of Finance and the State Administration of Science, Technology and Industry for National Defence, also unveiled a 10-year blueprint to promote the commercial space sector.

LinkSure Network, a Chinese free internet access provider, announced a plan in November last year to launch China’s first Wi-Fi satellite in 2019.

It aims to send 272 satellites into space to provide free Wi-Fi globally by 2026. The first batch of investment will hit 3 billion yuan (US$447mil).

Similar to Elon Musk’s Starlink plan, the satellites will be used to expand internet coverage and boost internet speeds, the Shanghai-based internet firm said.

“The starting point of such a plan is to offer free internet connections to people around the world, especially those in underdeveloped areas or rough terrain,” said Wang Xiaoshu, rotating president of LinkSure Network.

The company, founded in 2013, became a unicorn – a startup valued at more than US$1bil – in 2015 by raising US$52mil in its A-round of financing.

“Satellite connection will be a great supplement to the ground network. The ground network, which relies on stations, has limitations due to, for example, weather and land form,” said An Yang, chief scientist of LinkSure’s satellite project.

“On a global scale, the number of satellites is far from meeting the huge demand for communication. The future of the communication sector must be a combination of space and ground,” he said.

Under the plan, revenue will come from services to high-end users as well as those provided to areas that the ground network is unable to reach, An said.

The space era: In this undated photo, An Yang, chief scientist of the satellite project at LinkSure Network, introduces the company’s satellite system at a news conference in Beijing. — China Daily

LinkSure is not the first. A string of startups have sent satellites into space for different purposes.

For instance, Guoxing Yuhang Co Ltd, or ADA Space, a private firm based in Chengdu, Sichuan province, launched two artificial intelligence satellites at the end of last year.

Though the country’s internet giants have not directly announced plans to develop, produce or launch satellites, they are showing a desire to do so.

Tech conglomerate Alibaba Group launched a communication satellite to support its online shopping gala last year while Baidu chief executive officer Robin Li said earlier that he hoped more support could be given to private companies in the civilian space segment.

Another tech giant Tencent Holdings Ltd has also jumped on the bandwagon by investing in US startup Moon Express, which was founded in 2013 by a group of space entrepreneurs.

The US startup is looking to profit from the commercial space sector through leveraging core technologies including using drones to mine asteroids.

Compared with state-owned companies, private firms are better at commercialisation including attracting and using money and resources, which will greatly improve efficiency, said Yang Feng, chief executive officer of Spacety, a commercial aerospace company specialising in developing commercial micro and nano satellites.

“It is also a promising area that state-owned and private space companies can supplement and co-operate with each other,” he added.

Notably, some private players have also entered the overseas market. China Communication Technology Co Ltd in Shenzhen, a satellite-based communication services provider, has been beefing up its overseas presence to exploit foreign opportunities.

“We aim to extend our business to Africa this year and will tap into one or two Belt and Road economies each year,” said Wu Guangsheng, president of CCT.

CCT is currently offering services and products in the US, Europe, the Middle East and nine other countries and regions that are participating in the Belt and Road Initiative.

In 2017, its overseas revenue was about 9 billion yuan, which made up more than 60% of the total.

It also plans to further explore South-East Asian markets including Indonesia, Malaysia and the Philippines, and promote its products in Central Asian economies such as Kazakhstan.

Last year, the company entered the Philippines by acquiring G Telecoms Inc, the third-biggest telecom operator in the local market.

“In the past, we could only co-operate with local (telecom) carriers in foreign countries by selling our equipment to them. But with this big step, we can operate independently, be it launching our own satellites or providing data-related services,” Wu said.

The business could have huge potential as some 75% of the Philippines’ 100 million population are aged 25 or under and they have a voracious demand for communication services.

So far, CCT has received orders from civil aviation and public security departments in the Philippines, Indonesia and Malaysia.

In 2018, at least 15 private space companies disclosed their financing with the total amount estimated to reach more than 2 billion yuan, according to a report from 36Kr, a science and technology media group.

A report from China Money Network pointed out that seven private space companies had raised more than 1.66 billion yuan by August 2018.

MatrixPartners China, IDG Capital, China Growth Capital and Shunwei Capital were among the major investors.

Despite intensive capital support, industry insiders pointed out that there is still a long way to go for Chinese private firms to gain a lead.

For startups, money is still the bottleneck, said Jiang Yunwei, president of CITIC Juxin (Beijing) Co Ltd Capital Management, in a report.

“A company cannot earn money by launching a single satellite and the commercialisation of satellites needs a network of dozens of satellites, which costs a lot,” he said.

A satellite network requires at least 1.8 billion yuan to 2 billion yuan, according to Xie Tao, founder and chief executive officer of Beijing-based space startup Commsat Technology Development Co.

Facing such pressure, satellite startups are expected to address another challenge – to reduce the cost of developing and launching up satellites.

“Companies should change their approach of using costly accessories made only for space,” said Xie. “Private companies can leverage commercial components to replace expensive ones.

Zhang Jiacheng, an investor in space startup OneSpace, agreed.

“China is still at the starting point in the commercial space sector. A well-rounded system needs to be established to offer space startups affordable and sustainable services.” — China Daily/Asia News Network

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Why Huawei’s 5G technology is seen as a threat by the US


Reuters pic.

The term 5G stands for a fifth generation — to succeed the current fourth generation of mobile connectivity that has made video sharing and movie streaming commonplace.

The new technology will require an overhaul of telecommunication infrastructure.

The 5G will do more than make mobile phones faster — it will link billions of devices, revolutionising transportation, manufacturing and even medicine. It will also create a multitude of potential openings for bad actors to exploit.

The vulnerability helps explain the rising tension between the US and Huawei Technologies Co, China’s largest technology company.

Huawei is pushing for a global leadership role in 5G, but American officials suspect that could help Beijing spy on Western governments and companies.

“Huawei’s significant presence in 5G creates a new vector for possible cyber-espionage and malware,” Michael Wessel, a commissioner on the US-China Economic and Security Review Commission that advises Congress, said in an interview.

By connecting whole new classes of products, 5G “creates new vulnerabilities”.

The technology holds great promise. Forests of gadgets will communicate instantly via millions of antennas. Cars will talk to each other to avert lethal crashes, factory foremen will monitor parts supplies and doctors can perform remote surgery as video, sound and data flow without delay.

Connections will be 10 to 100 times faster than current standards — quick enough to download an entire movie in seconds.

Yet, US national security officials see billions of opportunities for spies, hackers and cyber-thieves to steal trade secrets, sabotage machinery and even order cars to crash.

Citing security threats, the US has been pushing allies to block Huawei from telecommunication networks. The US Congress has banned government agencies from buying the company’s gear.

Why is the United States intent on killing Huawei? Look at the data below:

Huawei employs more than 10,000 Phd degree holders as well as many talented Russian mathematicians.

Do you know how many Huawei employees earn more than 1 million yuan (RM603,280) a year? More than 10,000 people.

Do you know how many Huawei employees earn more than five million yuan a year? More than 1,000 people!

In China alone, Huawei’s research and development expenditure is 89.6 billion yuan.

Among the Big Three, Alibaba employs 30,000 people, Baidu 50,000, Tencent about 30,000, leading to a total of 110,000; but Huawei’s global employees total 170,000.

Alibaba’s profit is 23.4 billion yuan, Tencent’s 24.2 billion yuan, Baidu’s 10.5 billion yuan, and their profits total 58 billion yuan, but 70% is taken away by foreigners. Since 2000, Huawei has earned 1.39 trillion yuan from abroad.

In taxes, Tencent pays more than seven billion yuan a year, Alibaba 10.9 billion yuan, and Baidu 2.2 billion. Huawei pays 33.7 billion yuan, which is more than the total of the earlier three firms.

Huawei is a high-tech company, and technology represents the true strength of a country.

In China, many companies can’t last long because there are always other companies ready to replace them, but Huawei is irreplaceable.

Huawei is a 100% Chinese company that has not been listed and does not intend to go public because of the susceptibility to be controlled by capital (which the United States can simply print money to do).

Huawei is the first private technology company in China ever to join the league of the world’s top 100. The Chinese should be proud of Huawei.
FMT NewsKoon Yew Yin is a retired chartered civil engineer and one of the founders of IJM Corporation Bhd and Gamuda Bhd.

The views expressed by the writer do not necessarily reflect those of FMT.

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Malaysian Securities Commission to weed out virtual scams


SC innovation, digital and strategy executive director Chin Wei Min said those who have identified themselves to the commission can operate up to March 1. “Even if they don’t want to be in this business anymore, whatever they are holding, whether it’s money, crypto assets or digital assets, should be returned to their clients. Otherwise, we will take action.
KUALA LUMPUR: All companies engaging in digital assets will have to make themselves known to the Securities Commission (SC) by Friday, even if they have decided not to carry on once the regulatory framework comes into force.

This includes operators who are not registered with Bank Negara under the anti-money laundering and counter financing of terrorism – digital currencies (sector six) and those operating “underground”.

The SC will reserve the right to take action against those who fail to identify themselves by Friday on grounds of breaching the securities law.

SC innovation, digital and strategy executive director Chin Wei Min said those who have identified themselves to the commission can operate up to March 1.

“Even if they don’t want to be in this business anymore, whatever they are holding, whether it’s money, crypto assets or digital assets, should be returned to their clients. Otherwise, we will take action.

“The reason we also allow people to continue with their withdrawals and sell down is to ensure that there is an orderly market.

“The last thing we want is to cause confusion, and hopefully, there are no untoward fraudulent activities that people will capitalise on in this transition period and take advantage of investors,” he told a media briefing here yesterday.

While the regulation does not affect operators who are not incorporated in Malaysia, the SC can still take action against them under the Capital Markets and Services Act 2007 if the products are marketed, sold, or its operations exist in Malaysia.

Operators who identify themselves to the SC must state their intent, whether they want to resume their activities, of which certain obligations have to be met, or whether they want to wind down their business.

The SC will put up a list of operators and companies that have registered and received a letter from the commission for investors to check if their monies are with legitimate sources.

Chin also reiterated that operators are not allowed to accept new investors, list new products or conduct any sales and marketing activities during this period.

A statement by the SC last Thursday said platform operators would not be allowed to accept new investors and are only allowed to facilitate the withdrawal or transfer of client assets with the written instruction of investors.

They are also not allowed to conduct any initial coin offerings (ICOs) without prior authorisation.

Chin called on all ongoing ICOs to cease activities and the monies or digital assets to be returned to investors until the operators apply for authorisation and after they understand the SC requirements.

The guidelines are expected to be released by the end of the first quarter this year.

“If you are looking at the ones that are out there currently, the standards of the white paper are of low quality. It is important that this falls under regulated activity.

“We recognise that this is an alternative fundraising avenue. The idea here is to allow us to take out all the scams and fraudulent activities and at the same time, provide a platform for our early stage entrepreneurs to raise money,” said Chin, adding that the SC did not want people to take advantage of this as investors are pumping in money on the other end.

This is a high-risk investment and Chin also hinted that there could be a certain threshold for investors.

The Capital Markets and Services (prescription of securities) (digital currency and digital token) order 2019, which kicked in last Tuesday, will see those operating unauthorised ICOs or digital asset exchanges facing up to a 10-year jail term and up to a RM10mil fine.

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

By royce tan The Star

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Fintech – disruptive technology

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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