China Inc in Barcelona and Hong Kong’s crypto ambitions

Hello, this is Kenji from Hong Kong, where everyday life is gradually returning to normal. After three-plus years of various restrictions, the mask mandate was finally lifted on Wednesday. A number of Hong Kong-listed companies are switching back from virtual to real press conferences for the annual earnings season, which will get into full swing this month.

Other business-related events, such as Credit Suisse’s annual investment conference, will also be held in-person for the first time in three years. The Hong Kong Monetary Authority will co-host a central bankers’ conference this month as the local government attempts to repair its reputation as an international hub, which has been tarnished by harsh pandemic policies and political repression.

Europe, meanwhile, is already back to normal, with Mobile World Congress (MWC) in Barcelona returning to its full glory this year. Finally free from zero-Covid travel controls, mainland Chinese tech companies are rushing back, including Huawei Technologies, in an attempt to reconnect to the world, rebuild relationships with clients, and reach over to new opportunities.

But back home in Beijing, it’s another story. The “Two Sessions” annual political event set to open on Saturday is expected to be held under strict Covid restrictions, with accredited reporters covering ceremonies in the venue required to quarantine beforehand.

Roaring back in Barcelona

Bar chart of Phones shipped in 2022, in millions showing Foldable smartphone market leaders

Two of China’s top smartphone makers — Honor Device and Oppo — have chosen to release their first foldable models for the international market in Barcelona this week, in a bid to challenge Samsung Electronics, by far the leader in this niche but lucrative category.

Honor, the second-largest handset maker in China after Xiaomi, sent its “biggest international presence ever” since the company was spun off from Huawei three years ago, reports Nikkei Asia’s chief tech correspondent Cheng Ting-Fang.

Runar Bjorhovde, tech analyst at a research company Canalys, told Nikkei Asia that MWC is an opportunity for Chinese brands to “tell a better brand story and connect with channels, retailers and telecom operators during the biggest mobile tech trade show in Europe. Most developed western European markets are still dominated by Apple and Samsung, so Chinese players have to make some breakthroughs on this.”

Huawei, meanwhile, is using MWC as a springboard to get back on to the world stage. It occupies the biggest exhibition space in the mobile tech fair this year, but without its once-iconic smartphones.

According to Nikkei Asia’s Silicon Valley correspondent Yifan Yu, Huawei’s focus is on cloud services and 5G communications for overseas corporate clients, as years of crackdown by Washington has decimated Huawei’s consumer electronics business.

Sony’s next instalment

For the past 10 years, Sony has been busy turning itself into a company that would be unrecognisable as Sony to anyone who has not followed that transformation closely. The TV show The Last Of Us — currently streaming on HBO and based on one of the most successful PlayStation games of all time — has become a powerful symbol of that evolution.

Sony does still produce a fair bit of technology hardware (its sensors, for example, are a critical component in the autonomous driving projects of carmakers around the world), and it is still significant in the consumer electronics game, write the Financial Times’ Leo Lewis and Kana Inagaki.

But now, say analysts who have followed the company for many years, Sony should be thought of — and valued by investors — as a media company. Its scale in music, games and films is well known. Less well flagged is the almost monopolistic position it has staked out in the global distribution of Japanese anime, a market that has expanded dramatically through streaming services, is poised to generate more revenues abroad than in its home market for the first time, and which some estimate could be worth over $47bn globally by 2028.

This is the reality that will be inherited by Hiroki Totoki, the group’s chief financial officer who will take over as president in the spring. Sony’s transformation, according to analysts, is far from complete. The real value lies in exploiting more aggressively the crossover opportunities that arise from all the potentially complementary media businesses it owns. The “Last of Us” is an excellent start, but the momentum must be maintained, analysts say.

Heading the other way

While financial regulators around the world are seeking to implement tighter regulations on the cryptocurrency business, Hong Kong is openly aspiring to become a crypto hub.

The latest proposals from the city’s financial regulator aim to create a licensed crypto trading regime and even open up retail dealing in digital tokens. The local government, meanwhile, is set to allocate HK$50mn ($6.4bn) in the coming fiscal year from April to develop technology underpinning cryptocurrencies.

“Hong Kong is desperate to rebuild and catch up with Singapore,” Alex Au, co-founder of the city’s Digital Asset Society, told Nikkei Asia’s Pak Yiu.

The crypto charm offensive comes as the Chinese territory seeks to rebuild its international image after years of harsh coronavirus restrictions and a draconian national security law that has eroded confidence in the rule of law and undermined its status as a global financial hub.

Digital redux

The advent of smartphones snatched away a huge chunk of demand for digital cameras. But cameras are making a comeback, with the latest models boasting artificial intelligence-based technology and other advanced features, report Nikkei’s Tsuyoshi Tamehiro and Keiichi Furukawa.

This tech-heavy trend, however, has led to heftier price tags. The global average price for a digital camera was ¥85,000 ($623) in 2022, more than double what it was three years ago. According to the Camera and Imaging Products Association, a Japanese trade group, global shipments have been on a long-term decline since peaking in 2008 but seem to have bottomed out in 2020.

“Younger generations are growing more interested in photography from interacting with lots of pictures on social media, while older fans familiar with single-lens reflex cameras are interested in new technologies behind mirrorless cameras,” said Hiroyuki Ikegami, general manager of imaging business unit at Nikon, one of the market leaders.