Analysis: Seven major U.S.-funded technology companies are besieging Hong Kong and turning it into a technology island | Hong Kong Innovation and Technology | U.S.-China Relations | Huida

[The Epoch Times, April 25, 2024](Epoch Times special reporter Gao Minghui reported in Hong Kong) Apple will remove Meta’s WhatsApp and Threads from its app store in mainland China starting from the 19th at the request of the Chinese Communist Party government. Hong Kong was originally a bridge for US capital to enter China. In recent years, Hong Kong has decoupled from foreign countries. US-funded technology companies no longer put new products in Hong Kong. Most of the seven major technology companies in the US stock market have new products that no longer support China and Hong Kong. Quietly following the US government’s containment policy. Hong Kong is gradually turning into a technological island.

In response to the continued rise in the stock prices of U.S. technology giants, the U.S. investment community coined the new term “Magnificent 7”. The seven stocks are Apple (AAPL), Microsoft (MSFT), Alphabet (GOOGL. Google’s parent company), Huida ( NVDA), Amazon (AMZN), Meta (META. Facebook parent company) and Tesla (TSLA). The total market value of the above-mentioned seven stocks is close to US$13 trillion. Compared with the total market value of the Hong Kong stock market, which is only US$3.88 trillion, the entire Hong Kong stock market is only equal to about two technology giants. Its financial and technological influence can be imagined.

In the past, US technology giants were keen to come to Hong Kong mainly to prepare for entering China. In 2011, Apple listed Hong Kong as one of the first release locations for iPhone 4s in Greater China, and in the same year opened an Apple flagship store at IFC (International Financial Center) in Central. In addition, since Facebook opened to all people over the age of 13 with email addresses in 2006, except for some universities in the United States and Canada, Hong Kong people can open an account immediately, and in 2014, it even opened an office in Hong Kong.

However, the relationship between the United States and China has deteriorated in the past three years, and Hong Kong has positioned itself closer to the CCP. The then US President Trump signed a presidential decree on July 14, 2020, canceling Hong Kong’s special tariff status and special economic treatment. The government’s technology and chip ban includes Hong Kong within China, and American companies are gradually following the government’s lead.

The most well-known chip company is NVIDIA, whose stock price has soared due to its production of artificial intelligence (AI) chips. However, the first version of the artificial intelligence chip ban issued by the U.S. government in October 2022 prohibited Huida and other major manufacturers from supplying high-end AI chips such as A100 and H100 to Chinese customers. Later, Huida launched low-end AI chips specifically for the Chinese market. A800 type chip. After the United States revised it in October last year, low-end chips were banned. Even the civilian game graphics card RTX4090 was banned from commercial and production use.

In March this year, the White House revised export restrictions again and banned the export of notebook computers containing high-end chips to China. The overall ban includes Hong Kong and Macao, and Hong Kong can no longer act as a white glove. In addition, Taiwan’s “Economic Daily” reported early last year that semiconductor technology giant Huida gave up Hong Kong and chose to set up a logistics center in Taiwan. Its competitor Advanced Micro Devices (AMD) also moved its finished product warehouse in Hong Kong to Taiwan.

Local laws in Hong Kong prevent the most popular artificial intelligence (AI) concept in the past two years: large language models (LLM) from being officially launched in Hong Kong. OpenAI, which has a cooperative relationship with Microsoft, launched its product ChatGPT in November 2022. OpenAI also decided not to open to Hong Kong in May last year due to potential risks and other reasons, and has maintained it to this day; Google’s Bard and Gemini have successively launched support for There are more than 150 countries, but Hong Kong and China are not on the list; Microsoft’s free LLM New Bing powered by OpenAI does not explicitly prohibit Hong Kong users from using it, but some Hong Kong users are blocked by Microsoft, and Bing’s image generation function is not open to Hong Kong users. In addition to Meta’s latest WhatsApp and Threads being removed from the shelves in mainland China, the company’s Meta AI is currently only available to users in the United States and 13 other countries. If it follows the practices of its AI peers, it is likely not to be available in Hong Kong.

Apple still regards Hong Kong as the place where the iPhone was first released. However, starting with the iPhone 14, the phone has a built-in satellite emergency service, equating Hong Kong with China. The version sold is not equipped with a satellite connection, and the same is true for the subsequent iPhone 15.

As for Amazon, it did not operate e-commerce and e-book business Kindle in Hong Kong in the past. In 2004, Amazon officially entered the Chinese market with the acquisition of Joyo.com for US$75 million. However, in 2023, Amazon.cn and e-book Kindle ceased operations.

Musk, CEO of Tesla (TSLA), which has a factory in China, has not restricted the operation of new products in Hong Kong and China. However, the website of Starlink, another unlisted satellite network provider owned by him, shows that it has not There are plans to operate in China and Hong Kong, and at the same time, the network will be expanded to Singapore this year.

Hong Kong’s financial industry has shrunk. According to Bloomberg statistics, nearly 200 Hong Kong bankers have been laid off in the past year, and the amount of Hong Kong IPO funds raised has dropped to tenth in the world. One of the strategies to solve this predicament is to develop technology, but various countries have also stepped up efforts to Hong Kong does not have an advantage when it comes to technology investment. An EU report shows (see table) that the EU’s R&D expenditure accounts for 2.24%, while the United States accounts for 3.46%, Japan accounts for 3.34%, and even China accounts for 2.41%. At the end of last year, the Hong Kong government released the “Hong Kong Innovation Activity Statistics”, which showed that the ratio of total R&D expenditure to GDP was only 1.07%.

Hong Kong is already lagging behind in innovation and technology, and its R&D expenditures are lower than those of other countries. The chance of catching up with low expenditures is slim. In addition, seven of the world’s most influential technology companies are gradually abandoning Hong Kong. Hong Kong will eventually Gradually becoming an international technological island.

Editor in charge: Lian Shuhua#