Shulou(Shulou.com)06/03 Report--

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The US Department of Commerce demanded that a Chinese-born, Chinese-raised Chinese company planning to list in the US not transfer its technology back to China.

Ridiculous, ridiculous, and thoughtful.

The U.S. Department of Commerce requires that a Chinese company born and raised in China and planning to list in the United States cannot "export" its technology to China.

The magical plot really happened in reality.

Moreover, the bad impact does not lie in whether to go public in the United States or not, but in the vast number of start-ups that have established R & D branches in the United States.

What exactly is going on?

A Chinese robot company's difficulties in listing in the United States

CloudMinds, founded by SoftBank Sun Zhengyi Investment and Huang Xiaoqing, former president of China Mobile Research Institute, revealed that the biggest obstacle to its listing in the United States came from the ban of the U.S. Department of Commerce, Reuters reported.

The company is engaged in AI, robotics, cloud computing and other businesses. It is headquartered in Beijing and has R & D branches in the United States.

However, during the IPO process, it was requested not to return "American technology" to China.

Reuters found in the company's internal training videos and communications that the U.S. Department of Commerce sent a letter to the company last July prohibiting it from transferring technology and technical information from its U.S. R & D branch back to its Beijing headquarters, even software bugs, unless it obtained a license.

A Chinese company that has opened a branch office in the United States hopes that the R & D organization in the United States will create value for the company. If the results cannot be shared, the significance of building this institution will be greatly reduced.

Moreover, the ban is ridiculous and absurd to the point that it is not worth it for American investors.

For example, such as Dacheng, has submitted a prospectus to the SEC, ready to list on the New York Stock Exchange, by this ban does not affect the IPO, another said, listing financing money, do not encourage investment in the United States R & D branch?

After all, it looks like: if it goes public, then for the United States, money can be taken away; technology, a line of code can not be exported.

Which company with headquarters in China can still spend its main attention on R & D in the United States?

Therefore, it is really lamenting that American leeks are also leeks after all. The world is the same cold and hot, different red and green, and the same is cut.

And such a policy, does not also indirectly hit the enthusiasm of listed stocks in the United States? Will it not be another giant that has already been listed "rabbit dead fox sad"?

Perhaps the U.S. Department of Commerce has its little nine in mind, but I don't know how many accounts have been calculated for hurting a thousand people and damaging themselves.

A paper ban separates China and the United States

The main business of Dada Technology is "cloud intelligent robot," that is, the entity of robot works in the production and living environment online, but the control part of robot, equivalent to "brain," runs in the cloud.

Although in China, where competition is fierce, Dacheng is not the industry leader, but he is also a bit famous.

The founder of the company, Huang Xiaoqing, former president of China Mobile Research Institute, has been founded for five years and received $300 million in Series B financing from SoftBank Vision Fund in March last year.

The company already has several robot products, such as the commercial service robot XR-1:

With SoftBank's support, they also made a cloud version of SoftBank's Pepper robot Cloud Pepper:

In July last year, Dada filed a prospectus with the SEC, and then updated it in September, hoping to raise $500 million by listing on the New York Stock Exchange.

According to the prospectus, in the first half of 2019, Dada Technology earned $148 million in revenue and lost nearly $100 million. Moreover, neither prospectus mentions information that is prohibited by the Ministry of Commerce from transmitting technology back to China.

But news of the company's IPO delay came last October as profitability was tested.

Fortunately, however, the domestic Kechuang Board is another opportunity.

Strangely, however, the company did not change the way it transferred technology in the months after receiving the Commerce Department ban, Reuters reported.

So in January of this year, Dada Technology has begun to close down employees in Silicon Valley.

What is this US move?

Seeing that Dazhou Technology is restricted from exporting by the United States, many people may think of a group of Chinese companies that were listed on the "blacklist" of the United States last year.

The only question is, why are companies like Dada Technology, which are not on the list, restricted by U.S. policies?

This brings us to another broader policy of regulation.

The U.S. Department of Commerce has a set of so-called "de minimis calculation guidelines" to limit companies using U.S. technology:

Determine whether the U.S. government has the right to block exports by determining the proportion of U.S. products and technologies produced overseas.

According to existing U.S. regulations, if a company uses at least 25% of U.S. product technology, the company needs to apply for an export license from the U.S. Department of Commerce to sell related technology and products to Chinese companies.

Dada Technology has branches in the United States and is preparing to list in the United States, so it is naturally restricted by this clause.

In short, the United States achieved its goal of restricting technology exports to China through two-handed control.

One is to ban Chinese companies from entering the entity list from selling products and technology to American companies.

Second, for domestic and overseas companies that use American technology, American product technology exceeds a certain proportion and will be prohibited from exporting to China.

In the latter case, the penalties for non-compliance are quite severe: civil fines as low as $300,000, criminal fines as low as $1 million, and even prison terms may be imposed for each violation.

Even so, some hawks in the US are unhappy that the clause is not restrictive enough and are considering a sharp tightening of the restrictions.

In January this year, Reuters and other foreign media reported that the U.S. Department of Commerce had drafted a new regulation, which planned to change the export restrictions of some companies to China from 25% to 10% of U.S. technology.

And this restriction clause will also be extended to non-sensitive chips and non-technology products.

If implemented, the new rule would deal a blow to companies in the United States and elsewhere. Companies that export products that contain only a small amount of American technology, in particular, will have less room to live.

The new rules will force companies on the entity list to look for new suppliers. Last year, chip companies such as Xilinsi and Micron in the United States suffered heavy losses due to the impact of their business with Huawei.

More importantly, some non-American companies are also dissatisfied and helpless because the American tentacles are too long.

Recently, Huawei began to hand over orders for 14nm HiSilicon chips to SMIC, causing TSMC to lose a large number of orders because the technology in the United States accounted for more than 10% of this process, and Huawei had to lay out in advance.

Doug Jacobson, a U.S. trade lawyer who has pointed out the dangers of the new policy, predicts that these actions will greatly expand the scope of U.S. export controls and disrupt supply chains, and Huawei will eventually find other companies to fill the gap.

So the results are straightforward: America's allies and American companies are unhappy.

Chinese companies need to be vigilant

What is even more regrettable is that for Chinese companies, they will naturally be affected.

The restrictions imposed by the United States on technology have undoubtedly sounded alarm bells for Chinese technology companies.

As long as you have business dealings with the United States or are listed in the United States, you may face a knife falling at any time.

Originally, scientific and technological exchanges between China and the United States have become closer and closer, and globalization has become more and more integrated. Therefore, many Chinese enterprises have research branches in the United States. In order to attract and win over those Chinese who remain in the United States and to gather talents from all over the world to build a future, a large number of AI, robot and autonomous driving companies have landed in the United States.

For example, China's star autonomous driving companies have set up research and development centers in the United States. They recruit Chinese and multi-ethnic employees. Originally, globalization was booming. Who knows how to deal with the absurd policies of the United States when creating the future?

Before that, there was a technology founder who learned from the United States and established a dual-center venture between China and the United States. However, in a certain cross-ocean round-trip, he was suddenly closed to the Customs in a small black room-later I heard that he needed to stand in line, either with American identity or unable to come again.

So poor founder of Silicon Valley employees, since nearly two years can only video communication with the boss. His aristocratic dog, originally raised in Silicon Valley, has also been reduced to foster care everywhere to eat a hundred meals.

Who did you provoke? Who's getting pissed off by technology? Who provoked whom to go public in the United States?

Why do we have to choose between two sides?

Reference link:

https://www.reuters.com/article/us-softbank-group-cloudminds-exclusive/exclusive-softbank-backed-cloudminds-blocked-from-exporting-us-tech-to-china-idUSKBN20R07Q

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