A common belief is that the share divestments are due to increasing pressure from the Chinese government through regulatory crackdowns, especially through anti-monopoly laws. Such crackdowns have already led to a combined net worth loss of US$80 billion in 2021 for the top ten richest tech moguls in China.

Tencent’s stake sales

For context, Tencent had announced on Dec 23, 2021, that it will be paying out an interim dividend in the form of 457.3 million JD.com shares, which makes up 86.4% of Tencent’s stake in the e-commerce platform. The dividend payout is estimated to be worth HK$127.7 billion, or, about US$16.4 billion.

And two weeks later, Tencent announced a sale worth US$3 billion, disposal of 14.5 million shares of its stake in Shopee’s parent, Sea. It should be noted that this amounts to about 2.6% of the total shares of Sea, and that Tencent still holds an 18.7% stake in the Singapore-based company.

Tencent has also noted it intends to hold the majority of its stake in Sea for the long term.

Of note as well is that Tencent, along with Alibaba and Bilibili, were slapped with penalties for failing to properly report “about a dozen deals”. The penalties of 500,000 yuan (US$78,692) per deal are the maximum allowed under China’s 2008 anti-monopoly law.

After-sales effects

Tencent’s stake sales have led to drops in share prices not only for Tencent, Sea, and JD.com, but also for other Tencent-backed firms, such as Meituan and Bilibili. Forrest Li, chairman and chief executive officer of Sea, lost US$2 billion of his fortune in the past few days alone.

This comes as the latest blow to Li after losing about US$9 billion when share values fell 39% since October 2021.

Speculation and sentiment were that there would be continued stake sales, divestments, or disposals for Tencent as it looks to circumvent or counter the continuing regulatory crackdowns in China.

However, the share divestments have been noted as exit strategies by Tencent, with the funds going towards “other investments and social initiatives”.

Where to now?

As much as this sounds like a face-saving statement by Tencent, a fact of the matter is that the group has been putting funds into other markets, as much as China and Southeast Asia have felt like a focus for the group.

With China cracking down harder on its own tech giants, and with Sea having established itself as a leading player in Southeast Asia and looking to expand elsewhere, it only makes sense for Tencent to shift its focus towards untapped or upcoming markets.

Here’s where India comes into the picture, placing itself as an investment attraction with its large pool of well-educated entrepreneurs looking at new ways in which many businesses work using a fast-developing digital infrastructure.

The placement appears to have worked, considering the country has seen a doubling in its tech startup unicorn club in 2021 alone, having drawn US$39 billion in foreign investments.

Of note, however, is that Tencent has already been investing in the scene since 2016, with over US$2 billion put into Indian startups. Some examples include fintech startup Slice, as well as social media startups ShareChat and Lokal.

There was a temporary block on this plan, however. The Indian government put into place a requirement for approvals for Chinese investments, or really, investments from any countries sharing land borders with India, in a bid to prevent takeovers of imperiled Indian companies during the COVID-19 pandemic.

However, approvals started coming for Chinese foreign direct investment proposals in early 2021 on a case-by-case basis, cracking the gate open for Chinese investors to back tech startups in the country, with the results showing in 44 startups reaching the US$1 billion valuation and obtaining unicorn status in 2021 alone.

With that being said, it seems like Tencent is taking advantage in the midst of adversity.

By breaking up its high shareholdings in well-established companies in mature markets, thus abiding by Chinese regulations against monopolies, Tencent is then able to focus on investment opportunities like the Indian tech startup scene — an emerging market that has been earmarked for its untapped potential and similarity to the Chinese market, as well as its ability to generate long-term value for stakeholders.

The post What’s spooking Tencent and making them sell their shares off? appeared first on Tech Wire Asia.

Following the crackdowns by China regulators on foreign listings, Pinduoduo Inc. founder Colin Huang saw the biggest hit to his fortune when the e-commerce platform’s shares dove by almost 70%, a whopping US$42.9 billion.

Didi Global Inc. founder Cheng Wei saw his company’s value shoot up in the weeks before its June listing in the U.S., hitting a valuation of US$95 billion for the ride-hailing company, leaving Cheng with a stake valued at US$6.7 billion.

However, Chinese regulators cracked down on the variable interest entity structure and raised concerns about data privacy as well as vague cybersecurity. This resulted in Didi not only delisting by request of Chinese officials but also saw its shares plummeting over 60% after an investigation was declared.

This marks the latest effect of China’s continuing crackdown on its tech sector, as part of its bid to enforce censorship on the internet usage of its citizens. However, the delisting of all these China tech moguls leaves investors with a sudden lack of investment opportunities, especially since it has gotten even harder for a Chinese firm to list outside of China.

A loss for China tech moguls, a gain for Indian unicorns?

Enter the Indian startup scene, which has drawn to itself the attention and interest of investors with its large pool of well-educated entrepreneurs looking at new ways in which many businesses work using a fast-developing digital infrastructure.

This, in turn, has led to the doubling in the number of unicorns India has seen in 2021 alone, with 44 startups joining the prestigious club even as the country faced its fiercest battles against COVID-19.

Some of the investors drawn into this surge in numbers, that saw US$39 billion raised, included Japan’s Softbank, and America’s Tiger Global, and Alpha Wave Global.

This surge has also caused a bit of a gold rush, as backers who are traditionally warier have also taken to the scene with gusto as a response to the aggressive funding from their peers.

Interestingly enough, among the backers that have put funds into India are China tech moguls. Jack Ma of Alibaba fame is noted as an investor, despite looking at a US$13 billion net worth loss following the regulatory crackdown by China officials. Another is Tencent, which saw trimmed valuations after the same regulatory crackdown.

Unfortunately, as much as there are those who believe the bullish movements of investors in India’s startup scene will persist into 2022, there are critics who believe that many of these firms may be grossly overvalued.

One noted example was Paytm, the biggest IPO of the year. The fintech player is yet to make a profit, and its share price is down 40% from its IPO valuation within two days of its weak stock market debut.

The post China tech moguls crackdown may just be India’s gain appeared first on Tech Wire Asia.

China was the first major economy to pilot a sovereign digital currency, also known as a CBDC (central bank digital currency).

In fact, it is the only country that has continuously made strides with its new electronic payment system while the rest of the world is still in the research phase. That said, after having run numerous trials over the last two years for its digital yuan, the People’s Bank of China is now aiming for a wider reach by launching an e-CNY wallet app in the country.

To recall, over the past two years, cities throughout China have even been holding lotteries, distributing a total of 10 million digital yuan (worth about US$1.47 million at the time) to people in Shenzhen in October 2020, 20 million digital yuan (or US$3 million) in Suzhou in December 2020, and 40.2 million digital yuan (or US$6.2 million) in Chengdu in February 2021.

For context, e-CNY is essentially physical cash converted into a digital form, and it’s been in the works since 2014.

Distribution of the digital currency takes place using a two-tier system that transfers e-CNY from the PBOC to commercial banks. Banks will then distribute the currency directly to consumers.

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In November last year, PBOC’s Governor Yi Gang had said that China would continue to advance the development of its central bank digital currency and improve its design and usage, including increasing its interoperability with existing payment tools.

As of November 2021, the central banks said around 140 million Chinese citizens have opened digital yuan wallets.

As per the Reuters report, a notice in the app said it is in a research and development pilot phase and is only available to selected users through supported institutions that provide e-CNY services, including major domestic banks.

That said, the new e-CNY app is accessible on both China’s Android and Apple app stores since Tuesday, but only to people in 10 specific cities, including Beijing, Shenzhen, Chengdu, and Shanghai.

Test run at the Winter Olympics for China’s digital yuan

So far, Beijing seems to be focusing on ensuring the release and use of the digital yuan at the Beijing Winter Olympics in February this year — the first chance for the outside world to have a glimpse of the virtual currency.

Foreign visitors will be able to use the digital yuan to pay for things like accommodation and transportation within major venues at the Games, according to the government. 

There will also be ATM machines throughout the Games that can convert foreign currencies, including US dollars, into virtual Chinese money, which will be carried in a digital yuan card.

The Chinese government even urged American companies, including McDonald’s, to accept digital yuan before the 2022 Olympics. 

In fact, according to the Financial Times, the fast-food giant has been forced to expand the digital yuan trial to more of its restaurants in the nation in anticipation of the Winter 2022 Beijing Olympics.

The post China’s digital yuan app now available on Chinese Android, iOS appeared first on Tech Wire Asia.

For the past 15 years, Shanghai Automotive Industry Corporation (SAIC Motor) is China’s largest traditional automaker. Owned by the Chinese government, the automaker is now adding more features to its electric vehicles.

SAIC Motor recently announced the official operation of its Mobility Robotaxi, which is also China’s first L4 self-driving platform in China.

Cooperating with Momenta, SAIC Motor Lab would provide intelligent driving solutions to Robotaxi; its platform offers powerful computing power with 600 trillion operations per second.

Its “vision + radar” solution can also independently complete 3D perception and data-driven fusion to ensure multiple and high-level redundancies in the system.

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Now, Cipia, an auto-tech company providing automakers and fleets with advanced AI-based in-cabin sensing solutions for driver and interior monitoring, has announced the first purchase order from Tier 1 Technomous, and the start of production with China’s largest automotive company SAIC Motor.

Cipia is delivering its market-leading Driver Monitoring System (DMS), Driver Sense, for integration in the Roewe RX5 MAX car model running on TI TDA4VM SoC, with production already underway.

This project joins other car models already in serial production with Driver Sense on board. The project with Technomous for SAIC was included in Cipia’s IPO prospectus as part of the design wins and forecasted lifecycle value.

(Source – Cipia)

David Tolub, CEO of Cipia said, “The integration of the system in such a short time span is a testament to the quality of the solution and service level, and offers automotive manufacturers the ability to remain at the edge of technology and safety, and enjoy a competitive advantage in the market.”

Research from Continental China and non-profit organization HCVC, 74% of people who survived road traffic accidents attributed the main cause to distracted driving.

With the growing number of distractions in cars coupled with an overreliance on semi-autonomous driving features, there is a clear need for technology to mitigate the dangers of distracted driving.

The computer vision and AI technology powering Driver Sense monitors and analyzes the driver’s behavior by detecting visual attributes such as eyelids, pupils, gaze direction, and more. This then translates them to the physiological state of the driver (drowsiness, distraction, talking on the phone, etc.), enabling life-saving warnings and actions.

The Chinese automotive market has been in a steady growth state for the past two decades. In 2020, 25 million vehicles were manufactured in China, a figure more than the US and EU combined.

In recent years, Chinese automakers started acquiring international auto brands and targeting western markets with international brands.

SAIC Motor has been the top-selling automotive manufacturer in China for 15 consecutive years, reaching a sales volume of 5.6 million vehicles across its brands in 2020.

The post Chinese automaker SAIC Motor invests in driving monitoring system appeared first on Tech Wire Asia.

Around the world, a shortage of semiconductors, the tiny but critical chips used to calibrate cars’ fuel injection, run infotainment systems or provide the brains for cruise control, has upended automaking. Making matters worse is the supply chain crisis. To beat both the crisis, China’s carmakers are walking down the self-sufficient path.

Like many other large auto players around the world ,China’s big players too are taking matters into their own hands to build stronger domestic supply chains. The push comes as Chinese President Xi Jinping is pressing for stronger domestic supply chains that are less vulnerable to US sanctions and the pandemic. 

Earlier this month, China’s leading private automaker Zhejiang Geely Holding Group’s unit SiEngine Technology unveiled a cutting-edge automotive chipset–Dragonhawk 1. Geely Chairman Eric Li during the unveiling admits that “Semiconductors are extremely important for the country. 

They are the key to establishing secure and stable supply chains.” Dragonhawk 1, according to reports, is designed to serve as the brain behind smart cockpits, which include dashboard displays, navigation systems and cloud-based services. 

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The chip is built with 7-nm technology and is one of the most advanced automotive systems on a chip in the world. Its mass production will begin within the July-September quarter of 2022, and the chips are expected to be incorporated into Geely vehicles by the end of next year.

Among it’s added advantages includes allowing the cars to quickly process images and other data collected by driver-assistance systems, as well as external communications. Reports claim that the DragonHawk 1 has already received orders for several vehicle models and by 2023, it is expected that there will be at least two or three automakers choosing the chip.

To recall, SiEngine was formed by Geely unit EcarX and Arm China, the local unit of British chipmaker Arm. SiEngine aims to launch a new 5-nm chip as early as 2024 to meet the demands of constantly evolving self-driving technologies.

Other automakers upping China’s supply chain

SAIC-GM-Wuling Automobile, a joint venture between China’s state-owned SAIC Motor and General Motors, has also begun developing its own chips. The joint venture plans for at least 90% of chips used in its EVs to be made in China by 2025, according to a local media report.

Separately, even Dongfeng Motor has begun mass production of power semiconductor modules for new energy vehicles, while BYD looks to list a semiconductor unit to bolster development capabilities, Nikkei reports.

According to Nikkei, China is said to have a self-sufficiency ratio of about 20% for all semiconductors, and 5% or less for automotive chips specifically. British research company LMC Automotive separately reports that the global semiconductor shortage dented the supply of passenger cars in 2021 by more than two million, or the equivalent of around 10% of the Chinese market.

The post This is how China’s automakers deal with supply chain mayhem appeared first on Tech Wire Asia.

Hong Kong plays an essential role in linking China to the world. In 2020 alone, Hong Kong handled about 10.1% of mainland China’s exports and 14.3% of its imports, valued at US$263 million and US$295 billion, respectively, according to the Hong Kong Trade Development Council Research. 

It also stated that 53% of Hong Kong’s re-exports came from the mainland. The island is also part of the Greater Bay Area, a megalopolis that includes nine Southern China and Macau cities. It is home to around 71.2 million people or 5% of China’s total population.

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As e-commerce and digital banking become the norm, exciting fintech solutions are also rising from the island. Wallyt, a leading digital payment solution provider, recently revealed its partnership with All Link Pay, a cross-border payments platform founded this year and backed by a leading MSO (money service operator) group in Hong Kong. 

Wallyt helped launch the first cross-border payment wallet with the Bank of China (Hong Kong) in 2018 and a cross-border e-commerce payment collection and disbursement solution for banks and financial institutions in 2020. 

The one-stop mobile payment service provider now serves more than 150 banks and financial institutions in over 60 countries and areas, with clients including Uniqlo, Rolex, Lego, Prada, Disney, CIMB Niaga, Bank Muamalat, Marks & Spencer, and more. 

Meanwhile, All Link Pay (ALP) is part of the group with 20 years of foreign exchange service experience in Hong Kong with a large cluster of cooperation networks around the world and tens of thousands of clients in import and export. 

It established All Link Pay to broaden its range of cross-border payment collect and disburse services to serve better its existing clients moving online and attract the increasing numbers of new cross-border merchants. It supports popular platforms such as Amazon, eBay, Wish and more. 

Wallyt and All Link Pay collaboration will allow cross-border e-commerce merchants 

The Wallyt and All Link Pay collaboration will allow cross-border e-commerce merchants in Hong Kong and Mainland China to open one or multiple local currency accounts. 

The collaboration will allow the collection of international payments from online marketplaces, make foreign exchange transactions, withdraw money, and payout funds to suppliers, sellers, and any service providers worldwide. 

“Beside the cross-border payment, All Link Pay and Wallyt also established a deeper collaboration in risk management and financial inclusion. Based on the group’s comprehensive financial service capabilities, All Link Pay will further provide cross-border merchants with extensive overseas channel resources and a diverse set of financing options to grow their business,” Wallyt said in a statement announcing their alliance.

Teaming up with All Link Pay is part of the many partnerships that Wallyt has formed. This year also saw the Hong Kong-based fintech company working with Findora, Nepal’s NIC ASIA Bank, and Indonesia’s Arash Digital and Bank Neo Commerce. It is also listed in IDC China FinTech 50, based on financial industry research on technology, innovation, and financial services trends in China.

The post Wallyt and All Link Pay partner up for payments appeared first on Tech Wire Asia.

Ransomware, everywhere

Tech trends in cybersecurity have generally edged towards targeting remote working victims.

The spike toward record ransomware attacks and data leaks in 2021 looks likely to spill over into the coming year.

Cyber-extortion heists break into a victim’s network to encrypt data, then demand a ransom, typically paid via cryptocurrency in exchange to unlock it.

A swathe of factors has fueled the trend, including the booming value of cryptocurrencies, victims’ willingness to pay and the difficulty authorities have in catching attackers.

Businesses and the most-at-risk retail sector should start now, rather than later, to prepare for the incoming onslaught.

James Forbes May, vice president for the Asia Pacific at Barracuda believes that there will be a renewed focus on governments prioritizing cybersecurity initiatives, building alliances with vendors, and sharing data with other countries.

More electric vehicles

We’ve seen how the devastating impacts of climate change exacerbated by the COVID-19 pandemic have wreaked havoc on lives in the Asia Pacific. 

One way nations here are looking to ameliorate climate change is to promote the replacement or at least, increase of zero-emissions vehicles on the roads. 

This picture taken on September 9, 2021 shows a Nissan Motor autonomous vehicle during a press preview for a field operation test of Easy Ride, a driverless mobility service, at the Minato Mirai business district in Yokohama, Kanagawa Prefecture. (Photo by Kazuhiro NOGI / AFP)

Tech trends in the Asian automotive industry are definitely moving towards increased EV design, manufacture, but uptake may be fragmented, depending on the country.

Some nations with growing EV markets include India and Japan.

But the spotlight will be on China, a huge player in the Asian EV industry, whose government has pushed for more EVs to curb carbon emissions.

More Chinese automakers and players are collaborating, whereas home-grown Chinese stalwarts like Nio are targeting richer overseas markets.

As of now, a plethora of companies, even those traditionally in consumer tech, have put one leg into the proverbial electric boat to start production and sales of EVs. They include Huawei and  Xiaomi. Smaller countries such as Malaysia have made some semblance of headway into promoting EVs too, with taxation policies.

However, the biggest issue impeding its adoption in Asia is simply, the cost required to acquire EVs, which is especially true for the economically developing SEA.

Global leading automakers have, however, expressed interest in smaller markets such as Malaysia, though.

The semiconductor complexity will go on

Experts say the global chip shortage is like to continue until 2023 at least. 

Key chip supply chain player Malaysia may see increased competition from manufacturing leaders such as Vietnam, although more investments are coming in, such as from Bosch and Intel. 

Malaysia’s semiconductor industry may need time to recover, though, given the impact of not just COVID-19 lockdowns, but the recent flash flooding which has displaced tens of thousands of people and wrecked chip plants there.

China is trying to reduce its reliance on Taiwan’s TSMC to grow its home-grown SMIC. China is the largest buyer of 5G smartphones and also supplies a majority of consumer tech to the world.

Chinese big tech brands are moving to in-house design and manufacture of their own chips, one of the tech trends seen in the West too. They include Oppo and Alibaba.

More Big Tech regulation in China

In China, the big tech crackdown has been going full steam, as regulators have slapped fines and withheld licenses for a litany of charges that Chinese big tech have flouted.

At the same time, the state authorities have come up with draft after draft of legislation to govern the movements and operations of big tech in the country.

Even foreign firms aren’t spared, prompting some to even leave China. Some of these laws include anti-monopoly, data privacy, foreign IPOs, and more. 

Trade sanctions on China-sourced goods to the US have resulted in a trade war that has affected Chinese and global supply chains. This dynamic arguably underlies these recent actions by Beijing, particularly where it concerns the movement of citizen information or data across borders.

As a result, China has been expanding its influence into SEA, where some nations have a more favorable disposition towards Chinese tech.

Part of China’s strategy to avoid the US and move to trade in other markets has resulted in their interest in being a part of regional trade agreements. China is now part of the Regional Comprehensive Economic Partnership (RCEP), which starts January 1.

They also aim to rejoin the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in a post-Trump administration.

Meatless meat

Meat alternatives have become common in an increasing number of western households, thanks in part to Beyond Meat and Impossible Food plant-based products. They have improved taste-wise, and are cheaper now, partly because of increased awareness of the impact of meat production on the environment. 

In Southeast Asia, however, real meat still trumps plant-based or lab-grown meats — simply because it’s too expensive. 

Ironically, plant-based mock meat has been very popular in the region for decades, owing to a large number of vegetarians. Asia, is, after all, a region home to two of the world’s largest religions that eschew meat, namely, Buddhism, and Hinduism. 

However, most mock meat products suffer from sub-par texture, flavor, and closeness to real meat, which makes them unattractive to the mass market of meat-eaters. 

However, the demand is there — just not enough for manufacturers and developers to reach a critical mass production point where the prices match or even go lower than real meat products.

Producers are, however, taking stock of this trend as some Asian nations are already working on commercializing or at least, exploring these efforts, including Singapore, Thailand, and Vietnam.

Singapore-based Growthwell is one, and they aim to produce completely plant-based, nutritionally complete meat alternatives. 

With additional reporting by Joshua Melvin with Julie Jammot for Agence France-Presse

The post 2022: Five tech trends in the Asia Pacific appeared first on Tech Wire Asia.

The automotive industry has entered into an intense era of collaboration among carmakers, technology giants, and even software start-ups, among others.

This trend comes as countries, including China, accelerate into increased usage of EVs and AVs. Numerous partnerships have sprouted up in the past year, adding density and life to this ecosystem. 

Among Chinese automakers themselves, a handful of significant partnerships were made to accelerate the developments of EVs and AVs within the country.

In fact, China is shaping up to be the first real test of Big Tech’s ambitions in the world of car making. 

Take tech giant Baidu for an example, just 11 months after announcing that it is collaborating with automaker Geely to start a new company to build connected, autonomous electric vehicles, Baidu, which runs Chinese top search engine and a mapping app, announced that they would start mass production of its first “robot” EVs in 2023.

JiDU Auto, the electric vehicle venture between Baidu and Geely, would make EVs that are of the autonomous Level-four (L4), which needs no human intervention, Baidu Chief Executive Robin Li said during the company’s Baidu’s annual developers’ conference on Monday. 

JiDU was established only in March this year and in a mere 207 days, the venture reached the stage of developing intelligent driving and intelligent cockpit for a SIMU car.

This has set a new record in the industry, according to the CEO — last August, the internet company had launched a robocar with L5 autonomous driving capabilities. 

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This time, the automotive robot, deemed by Baidu as the ultimate form of vehicle transportation in the future, will demonstrate JiDU’s three aspects of their product philosophy.

First, the vehicle will have L4 autonomous driving capabilities to empower freedom of movement.

Second, the robot vehicle can communicate naturally with human beings thanks to the accurate recognition of human-vehicle interaction and speech semantics. 

Finally, the robocar is expected to have the capability to self-learn and self-iterate, which will continue to study user habits and improve user experience based on the habit data.

According to Baidu’s vision, intelligent transportation is the result of the deep integration of technologies as Artificial Intelligence (AI), 5G, and cloud computing into the transportation segment, based on autonomous driving, smart vehicles, and intelligent roads. 

The company also said that intelligent transportation can cut traffic accidents by 90%. Baidu’s autonomous driving capabilities have made rapid progress in recent months. As autonomous driving technologies develop, these vehicles will eventually be safer than human drivers, the company claims.

According to reports, with 115,000 rides provided in the third quarter of the year, Baidu’s autonomous ride-hailing platform Apollo Go has become the world’s largest autonomous mobility service provider.

Just last month, Baidu and self-driving startup Pony.ai won approval to launch paid, driverless robo taxi services that will see the firms deploy not more than 100 vehicles in Beijing.

According to Baidu’s statement, it would be its Apollo Go service’s first commercial deployment on open roads. The company is aiming for the Apollo Go service to be in 65 cities by 2025 and 100 cities by 2030, Li said during its latest quarterly results.

Besides Baidu, Geely and Pony.ai, Chinese electric-car maker BYD Co. is also apparently building a joint venture with tech startup Momenta to develop autonomous driving technology, according to Reuters.

It is said that BYD and Momenta have established a 100 million yuan three-way partnership to deploy autonomous driving capabilities throughout BYD automobile mannequin strains.

Known as DiPi Intelligent Mobility Co, the new partnership will combine BYD’s expertise in the auto sector with Momenta’s experience in smart driving algorithms, the startup said in a statement on Monday.

Reports are claiming that the preliminary scope of labor will embrace deploying “Level 2 plus” autonomous driving functionality throughout some car mannequin strains.

Separately, even SAIC Mobility, a unit of Chinese automaker SAIC Motor and Momenta, started providing autonomous robotaxi test rides to the general public in a Shanghai district as a part of a trial, earlier this month.

The post More Chinese automakers collaborating on EVs, AVs appeared first on Tech Wire Asia.

AI is so pervasive in China, that it’s used in everything from online shopping to… let’s just call it Big Brother activities.

Now, Chinese scientists have developed an AI “prosecutor” that can charge people with crimes. It was developed by a team led by Professor Shi Yong, director of the Chinese Academy of Sciences’ big data and knowledge management laboratory. 

Professor Shi claims the machine is able to file a charge with a whopping 97% accuracy based on a verbal description of the case.

Theoretically, the machine would be able to reduce the workloads of prosecutors, so they can focus their time and efforts on more difficult tasks. 

“The system can replace prosecutors in the decision-making process to a certain extent,” said Shi and his colleagues in a paper published this December in the domestic peer-reviewed journal Management Review.

We know it sounds like an android judge fitted with a wig and robes will be banging a gavel, calling silence in the courtroom, but that’s not really how it works — it’s really just an AI machine on a desktop computer, processing cases.

Not the first time China has used AI in the judiciary

Despite the aplomb with which the news broke, this isn’t actually China’s first foray into using AI in legislation. AI was introduced into the court process as early as 2016, through a tool known as System 206, according to SCMP.

System 206 can evaluate the strength of evidence, conditions for arrests, and the level of a suspect’s danger to society.

Nevertheless, the limitations of existing AI tools such as System 206 were that they were not designed to be a part of the decision-making process of filing charges and suggesting sentences, according to Shi.

Such higher-level decision-making requires the AI machine to identify and sort details of a case file and remove data that are extraneous or irrelevant to the crime whilst still keeping pertinent information. 

Furthermore, it would need to ‘convert complex, ever-changing human language into a standard mathematical or geometric format that a computer could understand.”

According to SCMP, charges can be meted out to suspects based on 1,000 traits (or variables) pulled from the human-generated case description text. The evidence would then be left to System 206 for assessment.

The machine was fed with over 17,000 cases from between 2015 and 2020 in order for it to learn how to recognize, sort, and include or exclude pertinent information.

It is so far able to prosecute eight of the most common crimes with a 97% accuracy. They include credit card fraud, illegal gambling operations, reckless driving, intentional injury, obstruction of official duties, theft, and fraud.

In typical China fashion, “picking quarrels and provoking trouble” are also criminal offenses — which the AI is able to recognize too… obviously. 

Shi and colleagues expect the AI prosecutor to, over time and with improvements, increase in accuracy and scope of function. Examples include recognizing uncommon crimes and filing multiple charges against a single suspect.

China not the first to use AI in sentencing

This is not the first instance of the use of AI in the judiciary system. 

In February 2020, Malaysia made history as its judiciary was the first to use AI in sentencing. 

Local reports said the AI would analyze a database of cases between 2014 and 2019 in the Eastern states of Sabah and Sarawak prior to recommending actions to the court.

Currently, the AI system the in East Malaysian judiciary is used for crimes such as drug possession and rape. 

The danger of AI biases

Importantly, when it comes to machine learning, AI bias plays a massive role in determining the outcome of things. Feed the machine with the wrong kind of information, and you’d get screwed-up results that can maim, kill or put the wrong people behind bars for life. 

AI bias can be so pervasive, silent, and invisible — many do not even notice that it exists in not just the information fed to the machine, but also how the entire machine is designed, and who designs it. 

Human beings by default, are already biased to begin with — especially when bias is deeply entrenched systemically in societies.

This makes engineering a bias-free machine learning system that doesn’t cause destruction to lives rather difficult.

Tech companies are quickly realizing this, and some have even embarked on programs to weed out AI biases, such as Twitter.

We’ve already seen how AI bias has caused deaths from autonomous cars, affected healthcare provision on the basis of race, and also discriminated against female job applicants, among a litany of other problematic issues. 

In Wisconsin, an AI risk assessment software called COMPAS was used in sentencing. The AI in COMPAS estimates the likelihood of criminals re-offending based on their responses to 137 survey questions. 

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However, a study found discrimination in how it assessed criminals based on their ethnicity. 

Black criminals were often labeled as higher-risk re-offenders even when they do not re-offend. 

Conversely, it produced the opposite results for white criminals by labeling them as lower-risk re-offenders even when they re-offend. 

There still remain important questions when it comes to its use in cases impacting actual human lives — AI bias is one, but ultimately, there is the question of who eventually takes responsibility.

In the case of China, will it be the prosecutors, AI machine, or the algorithm designer(s)?

The post China has developed an… AI prosecutor? appeared first on Tech Wire Asia.

China is not slowing down its crackdown on Big Tech — if anything, it keeps widening.

After recent back and forth over regulatory loopholes, the country’s internet watchdog finally unveiled draft rules to regulate how domestic firms can list overseas.

The move by the Cyberspace Administration of China (CAC) is seen as a step to govern companies in China applying for overseas IPOs “without complete restriction.”

The draft rule, released over the weekend, is basically an upgraded regulatory framework based on the overseas listing rule drawn up in 1994.

The changes were triggered mainly by the New York IPO by ride-hailing giant Didi Global Inc., which went ahead to list, in defiance of Beijing’s orders to halt. 

Following that, authorities have moved to halt the flood of firms seeking to go public in the US over the last six months.

The China Securities Regulatory Commission (CSRC), however, emphasized that the draft rules aren’t meant to tighten policies for overseas listings.

According to Beijing, these rules are to ensure companies comply with domestic laws governing foreign investment, cybersecurity, and data security.

Laws Chinese companies have to comply with before foreign IPOs

For starters, businesses holding information of over a million users in China must undergo a regulatory review after applying for an overseas IPO.

Given the countless internet platforms in China that have stored information of over 10 million or even 100 million users, this means almost all platforms operating in China that aspire to sell shares abroad need to go through a cybersecurity review.

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Additionally, firms whose overseas listings could threaten national security will be barred from listing abroad.

Details of what Beijing deems as a “threat to national security”, however, vary widely and are detailed in various domestic laws, including the new data security law. 

To top it off, companies whose activities raise cybersecurity concerns would have to go through security reviews.

“Improving the oversight of firms listing abroad comes against the backdrop of opening capital markets, and the regulations are to facilitate more healthy, sustainable and longer-term development,” the CSRC said, according to Bloomberg.

Firms involved in major domestic disputes over assets or core technology will also have their IPOs banned, added the regulator.

The CSRC would also require firms in certain sectors to obtain approval from industry watchdogs before registering with the securities regulator — “The direction of opening up remains intact,” CSRC added.

Debunking rumors, CSRC also noted that companies in China using the so-called variable interest entities (VIE) structure would still be allowed to pursue IPOs overseas after meeting compliance requirements.

The VIE structure has been used since the early 2000s by virtually every Chinese internet company to get around China’s tight restrictions on foreign investments in domestic businesses. 

Overall, the rules are applicable to those companies that are seeking to sell shares abroad and will be also applied to those seeking secondary listings, backdoor listings, or listings via special-purpose acquisition companies.

For those that have already been listed overseas, there will be a grace period of an unspecified duration to comply with local regulations, the CSRC said.

The new rules also raise the cost of violations in the wake of Didi’s delisting. Companies that don’t comply with registration rules could face fines of up to 10 million yuan (US$1.57 million), or face a suspension of the business and/or license.

Currently, regulators are seeking public consultation on the draft rules until January 23, 2021. 

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