Stop calling the killer whale encounters with boats 'attacks'

Kelsey Vlamis
Tue, June 27, 2023

Two Southern Resident killer whales.David K. Ellifrit/Center for Whale Research, permit number: NMFS 21238.

Killer whales near the Iberian Peninsula have been striking boats since 2020.


No doubt the encounters feel like attacks to the boaters, but experts say that may not be accurate.


The orcas are probably just playing so calling them "attacks" might be misleading.

"Killer Whale Attacks!" sure makes for a great headline, but it may not be quite accurate when used to describe the encounters between orcas and boats that have been taking place near the Iberian Peninsula in recent years.

Hundreds of these encounters have been documented off the southern coasts of Spain and Portugal since 2020. Researchers say they typically follow a similar pattern: an orca approaches a boat from behind and strikes its rudder repeatedly, sometimes until it is broken and the boat is immobilized. Most encounters end with minimal damage and no humans have been injured in one of these interactions.

But in at least three cases the killer whales have managed to sink sailboats, prompting talk of an "orca uprising" in which the whales were finally fighting back.

"Undoubtedly the people on board these little boats feel attacked," Andrew Trites, director of the Marine Mammal Research Unit at the University of British Columbia in Canada, previously told Insider. Still, he thinks it's unlikely that "attack" is an accurate description of what's going on.

Despite one theory about a "traumatized" killer whale seeking revenge on boats, Trites and other experts have said they believe the orcas are most likely just playing. They appear to be picking up and mimicking the play behavior of other killer whales, suggesting it is being positively reinforced, or that they are getting pleasure or some sort of benefit from it.

Trites said he was also concerned that framing the encounters as "attacks" could lead to misunderstandings about killer whales, not dissimilar to the fear of great white sharks inspired by a certain Hollywood movie that changed many people's impressions of the ocean forever.

Other experts, as well as a ship captain whose boat was targeted by an orca, have worried that the "attack" framing could lead scared boaters to take matters into their own hands and start shooting whales, which feeds into another potentially misleading aspect of describing these interactions as "attacks" — in all likelihood, the whales are more likely to get injured or killed in these encounters than the humans.

So, instead of using the word attack, which implies aggressive and violent action, it might be more accurate to simply describe the literal behavior that the orcas are engaging in: such as striking, ramming, targeting, or hitting boats.

Orca attacking boats are ‘playing games for adrenaline rush’

Miriam Burrell
Tue, 27 June 2023 

Orca attacking boats are ‘playing games for adrenaline rush’


Orca carrying out attacks on sail boats off the coast of Spain are doing it for an “adrenaline shot”, a researcher has said.

The attacks began in 2020 and at least 130 incidents have spooked sailors since, according to Spanish reports.

Last month, British sailors had to be rescued after the animals wrecked the hull of their yacht off the coast of Gibraltar and the boat started sinking.

In a nail-biting video, April Boyes, on board the vessel, can be heard saying: “Jesus, oh my God,” as each thud causes more damage to the boat, eventually destroying the rudder and piercing the hull.

Last Thursday, Dutch sailing team Team JAJO fell victim to an attack in the Atlantic Ocean to the west of Gibraltar while competing in The Ocean Race.

But a marine biologist, who Spanish authorities have commissioned to investigate the orcas’ behaviour, said they are ramming boats for fun and not out of malicious motives.

Renaud de Stephanis told El Mundo that what the animals are looking for is a reaction to their game, to give them “a kind of beastly adrenaline shot”.

“Don’t ask me how they started it because I don’t know, and I don’t think anyone ever will. What we do think is that it is a simple game for them,” he said.

Mr de Stephanis is completing a report on the orcas that will be given to the Spanish Ministry of Ecological Transition, in a bid to prevent further boat rescues.

He said: “If two or three killer whales really attacked a sailboat, they would sink it in a matter of seconds. We as humans can tell that it is an attack.

“But without wanting to make the matter less serious, a furious attack by that animal can have much worse consequences for a boat and for whoever is on board than a mere feeling of fear for a few minutes, until they leave.”

The orca thought to be initiating the playful attacks has a deep scar on its back, suspected to be caused by hitting an engine propeller.

“We believe that she is at the origin of everything,” Mr Stephanis told El Mundo.

“Today she is a subjuvenile orca. She belongs to a family of seven members and as far as we know, she is the most active of all.”

Underwater cameras have helped researchers capture numerous videos of the orcas since the incidents began in 2020.

One animal has been tagged with a geolocation system, which provides teams with satellite coverage for around 10 hours a day.

Panama pledges to purge more substandard ships from world's largest registry

Reuters
Tue, June 27, 2023 

A woman walk pass next to Panama flags a day before the inauguration of the Panama Canal Expansion project, in Panama City, Panama

PANAMA CITY (Reuters) - The Panama Maritime Authority (AMP) said on Tuesday it would continue to clean up its fleet to prevent substandard Panama-flagged ships from being detained in foreign ports, a week after the country was added to an international watch list.

Panama's ships registry was last week added to the "grey list" of the Paris Memorandum of Understanding (MOU), an agreement among 27 countries establishing an international inspection regime for foreign ships in other nations' ports, aiming to control ships' safety and environmental standards.

The grey list includes fleets with acceptable compliance levels but low detention rates.

Panama has removed 216 vessels from its ships registry, the world's largest, since 2021, for not meeting international standards.

In a statement, the AMP said that Panama's registry, which numbers at some 8,500 vessels, had been inspected at least 45,000 times, giving "an overall fleet compliance level of 96.17% and a detention rate of 3.83% downward."

Panama's inclusion on the watch list could be due to an aging fleet, the AMP said, noting that of 374 detentions reported in the last three years, 104 of the detentions involved ships more than 30 years old and 35 were of ships over 40 years old.

(Reporting by Elida Moreno; Writing by Sarah Morland; Editing by Stephen Coates)

2,700 people tricked into working for cybercrime syndicates rescued in Philippines

The Canadian Press
Tue, June 27, 2023 



MANILA, Philippines (AP) — Philippine police backed by commandos staged a massive raid on Tuesday and said they rescued more than 2,700 workers from China, the Philippines, Vietnam, Indonesia and more than a dozen other countries who were allegedly swindled into working for fraudulent online gaming sites and other cybercrime groups.

The number of human trafficking victims rescued from seven buildings in Las Pinas city in metropolitan Manila and the scale of the nighttime police raid were the largest so far this year and indicated how the Philippines has become a key base of operations for cybercrime syndicates.

Cybercrime scams have become a major issue in Asia with reports of people from the region and beyond being lured into taking jobs in countries like strife-torn Myanmar and Cambodia. However, many of these workers find themselves trapped in virtual slavery and forced to participate in scams targeting people over the internet.

In May, leaders from the Association of Southeast Asian Nations agreed in a summit in Indonesia to tighten border controls and law enforcement and broaden public education to fight criminal syndicates that traffic workers to other nations, where they are made to participate in online fraud.

Brig. Gen. Sydney Hernia, who heads the national Philippine police’s anti-cybercrime unit, said police armed with warrants raided and searched the buildings around midnight in Las Pinas and rescued 1,534 Filipinos and 1,190 foreigners from at least 17 countries, including 604 Chinese, 183 Vietnamese, 137 Indonesians, 134 Malaysians and 81 Thais. There were also a few people from Myanmar, Pakistan, Yemen, Somalia, Sudan, Nigeria and Taiwan.

It was not immediately clear how many suspected leaders of the syndicate were arrested.

Police raided another suspected cybercrime base at the Clark freeport in Mabalacat city in Pampanga province north of Manila in May where they took custody of nearly 1,400 Filipino and foreign workers who were allegedly forced to carry out cryptocurrency scams, police said.

Some of the workers told investigators that when they tried to quit they were forced to pay a hefty amount for unclear reasons or they feared they would be sold to other syndicates, police said, adding that workers were also forced to pay fines for perceived infractions at work.

Workers were lured with high salary offers and ideal working conditions in Facebook advertisements but later found out the promises were a ruse, officials said.

Indonesian Minister Muhammad Mahfud, who deals with political, legal and security issues, told reporters in May that Indonesia and other countries in the region have found it difficult to work with Myanmar on cybercrime and its victims.

He said ASEAN needs to make progress on a long-proposed regional extradition treaty that would help authorities prosecute offenders more rapidly and prevent a further escalation in cybercrime.

The Associated Press

Americans under 25 racked up more credit card debt than any other age group last year - and they're about to run into trouble as financial conditions tighten and inflation stays high

Jennifer Sor
Tue, June 27, 2023

View shows credit cardsThomson Reuters

Tighter interest rates could lead to a spike in credit card defaults for young adults, Moody's said.

Young borrowers have accumulated credit card debt to offset the effects of inflation.

Credit card balances grew 16% for card holders under the age of 25 last year, more than any other age group.

Defaults and delinquencies could spike among young adults who've racked up credit card debt, thanks to tighter financial conditions that are starting to impact how US consumer spend, Moody's Analytics said.

In a note on Tuesday, Moody's pointed to higher interest rates, which have raised the cost of borrowing and slowed down consumer credit usage. Outstanding balances across all consumer credit products grew just 0.2% in May, compared to 5.3% in May of last year. Meanwhile, accounts grew at a rate of just 0.1%, compared to 2.8% a year ago.

But higher rates potentially spell trouble for young adults, some of whom have already racked up credit card debt to offset the effects of inflation on their savings.

Credit card holders under the age of 25 have seen the largest increase in credit card debt over the past year, with the average credit card balance for that age group rising to $1,376, up 16% from $1,182 last year. Meanwhile, no other age group has seen a balance increase of more than 8%.

That's largely because young adults haven't yet entered their prime earning years, though they haven't been spared the effects of inflation.

"Given that young and lower-income borrowers have likely depleted a large share of, if not all excess savings at this point, it is not surprising that these individuals are using unsecured credit to augment their spending," Moody's economist Kyle Hillman said in a note on Tuesday.

"However, increased indebtedness will lead to higher delinquency and default rates as the job market weakens and wage growth slows, a concerning development for lenders active in this space."

The total rate of credit card delinquencies, or late payments, is currently hovering around 3.5%, Hillman said. That's below levels recorded before the pandemic, but still a full percentage point above levels seen in May of last year.

Experts have also warned of trouble in other areas of the credit market, thanks to banks pulling back on lending after the string of regional bank failures earlier this year. Tighter lending conditions, in addition to higher interest rates, could more than double the rate at which companies default on their debt, Societe Generale estimated this year.

Ukrainian debt is now one of the hottest emerging market investments as Russian setbacks lift Kyiv's economic prospects

Jason Ma
Tue, June 27, 2023 

Ukrainian President Volodymyr Zelenskyy.Pool/Getty Images

Ukrainian debt is one of the hottest emerging-market assets as Russian setbacks lift Kyiv's prospects.

Ukraine's sovereign dollar bonds have returned over 30% in the second quarter, beating other emerging markets, Bloomberg data show.

And Ukrainian debt warrants tied to GDP growth have jumped 48% in the last three months.

Ukrainian debt is now one of the hottest areas of emerging-market investing as Russian setbacks lift Kyiv's economic prospects.

Ukraine's sovereign dollar bonds have returned over 30% in the second quarter, beating other emerging markets, Bloomberg data show.

The gains were also concentrated this month, which saw the start of Ukraine's counteroffensive. While reports indicate slow progress, Ukraine's military has made steady advances, with the bulk of its Western-trained and equipped forces still waiting to deploy to the frontlines for a decisive surge.

Corporate bonds in Ukraine also posted the best returns in their category, and Ukrainian debt warrants linked to GDP growth have seen some of the biggest returns among emerging-market assets, according to Bloomberg.

The report said $3.2 billion in August 2041 notes soared to 40 cents on the dollar this week from 27 cents in late March.

In addition to its counteroffensive, Ukraine's fortunes also appeared to grow brighter after the Wagner Group's short-lived mutiny over the weekend.

The Kremlin has defused the crisis for now, but Yevgeny Prigozhin's band of mercenaries has shaken confidence in President Vladimir Putin's ability to continue his war on Ukraine — not to mention his hold on power.

Meanwhile, hopes for Ukraine's economy have improved lately. Last month, the International Monetary Fund raised its forecast on the country's growth this year to a range of 1% to 3%, up from a prior range for a 3% contraction to 1% growth.

That came after waves of Russian attacks on Ukraine's infrastructure and other civilian areas, the IMF noted as part of its review on a $15.6 billion loan program for Kyiv.

"Despite this, the Ukrainian economy has shown remarkable resilience – economic activity in the first quarter rebounded strongly, as the energy system rapidly recovered from attacks on critical infrastructure, foreign exchange markets stabilized, and inflation started to decline decisively," the IMF said. "A stronger recovery is expected as the economy progressively adapts to war conditions."

Regulators begin final safety inspection before treated Fukushima wastewater is released into sea

Tue, June 27, 2023 

TOKYO (AP) — Japanese regulators began the final inspection Wednesday before treated radioactive wastewater is released from the wrecked Fukushima nuclear plant into the Pacific Ocean.

The inspection began a day after the plant operator Tokyo Electric Power Company Holdings had installed the last piece of equipment needed for the release — the outlet of the undersea tunnel dug to discharge the wastewater 1 kilometer (1,094 yards) offshore.

TEPCO said the Nuclear Regulation Authority inspectors were to examine the equipment related to the treated water transfer and its safety systems as part of their three-day inspection through Friday. The permit for releasing the water could be issued about a week later, and TEPCO could start discharging the water soon after, though an exact date has not been decided.

The plan has faced fierce protests from local fishing groups concerned about safety and reputational damage. The government and TEPCO in 2015 promised not to release the water without consent from the fishing community, but many in the fishing community say the plan was pushed regardless. Neighboring South Korea, China and some Pacific Island nations have also raised safety concerns.

Government and utility officials say the wastewater, currently stored in about 1,000 tanks at the plant, must be removed to prevent any accidental leaks and to make room for the plant’s decommissioning. They say the treated but still slightly radioactive water will be diluted to levels safer than international standards and will be released gradually into the ocean over decades, making it harmless to people and marine life.

Some scientists say the impact of long-term, low-dose exposure to radionuclides is unknown and the release should be delayed. Others say the release plan is safe but call for more transparency, including allowing outside scientists to join in sampling and monitoring the release.

Japan has sought support from the International Atomic Energy Agency to gain credibility and ensure that safety measures meet international standards. IAEA has dispatched several missions to Japan since early 2022, and its final evaluation report is expected soon, though the organization has no power to stop the plan. IAEA chief Rafael Mariano Grossi is expected to visit Japan in early July to meet Prime Minister Fumio Kishida and visit the plant.

A massive earthquake and tsunami on March 11, 2011, destroyed the Fukushima Daiichi nuclear plant’s cooling systems, causing three reactors to melt and their cooling water to be contaminated and leak continuously. The water is collected, treated and stored in the tanks, which will reach their capacity in early 2024.

Mari Yamaguchi, The Associated Press

CRIMINAL (STATE) CAPITALI$M

China's local governments inflated revenue by $12 billion through phony property sales

Filip De Mott
Tue, June 27, 202

Property projects under go construction in downtown area on July 9, 2007 in Chongqing Municipality, China.China Photos/Getty Images

China's local governments created fake land sales to boost revenue last year.


That inflated their revenue by at least $12 billion, according to a national audit.


Including the fictitious deals, land-related income fell 23% in 2022 amid a steep real estate slump.

China's local governments boosted revenues through a number of bogus deals last year, the nation's national audit office revealed.

Some 70 regions were found to have sold land and state-owned assets to themselves, effectively moving money around to create the appearance of more revenue.

By doing so, these governments inflated overall revenue performance by at least $12 billion, the national auditor found, according to the Wall Street Journal.

That means China's real estate slump hit municipalities even harder than initially thought. With the fake sales included, local governments saw property-linked income decline by about 23% in 2022.

The country's property sector not only accounts for a major source of GDP growth in China, but land sales are a key source of income for local governments.

However, heavy debt burdens and the sharp decline in demand have brought down the property market, putting pressure on regional officials, who could no longer rely on private-sector developers for land deals as they withdrew from the scene.

To prop up sales and get around limits on official borrowing, local governments set up special funding vehicles to finance projects. Many were created days before land auctions were announced in order to buy property, the Journal previously found.

Auditors also found that local governments issued unjustified fines, misused money from Beijing, and extended guarantees to companies that boosted regional debt burdens.

Some governments have already warned on their debt risks, which were made worse by increased spending related to zero-COVID policies.

Though the country lifted these measures at the end of last year, the country now faces sputtering growth, while unemployment among youth rises. Most recently, this has led to the S&P Global to downgrade its forecasts on China.

To help accelerate the economy, Beijing officials are discussing a stimulus package that could boost local infrastructure spending. However, some analysts have noted that this may not be enough, while unsatisfied investors continue to withdraw from China's markets.

Read the original article on Business Insider

Turmoil at Byju’s Highlights Hurdles for India Startup Scene

Sankalp Phartiyal
Tue, June 27, 2023 

(Bloomberg) -- Even as India is being hailed as the next global growth story, a crucial building block for that success — its startup ecosystem — is getting pummeled.

Already stuck in a 15-month funding slump, India’s young companies are in danger of becoming collateral damage to the country’s highest-profile startup crisis in years. Byju’s, India’s most valuable upstart, is in turmoil after missing a deadline on financial statements, skipping payments on a $1.2 billion loan and losing its auditor and some of its board members.

The imbroglio reveals some of the unique challenges faced by India’s entrepreneurs and may spook global investors. The consumer market in India is characterized by more than a billion people with fast-growing but still relatively limited spending power, resulting in intense price competition that makes it harder for startups to reach profitability. And domestic venture capital is scarce, meaning founders need to attract foreign investors who can stomach the market’s risks.

It also highlights shortcomings in corporate governance, especially during a years-long startup boom that fizzled in early 2022. As venture funding was abundant and India was creating unicorns at an accelerating clip, Byju’s was among companies that enjoyed easy access to capital to spend on acquisitions and expansion, with their venture backers more focused on growth than earnings potential. After that funding dried up, attention has turned to lapses in oversight at companies such as Byju’s, said Ronnie Screwvala, founder of rival UpGrad Education Pvt.

“Governance and diligence has been low from all points of view,” Screwvala said. “Of course, it reflects on the entire entrepreneurial and investment ecosystem in India.”

A Byju’s spokesperson declined to comment.

Other prominent startups that got entangled in recent scandals include fintech firm BharatPe, which sued its co-founder and his wife for allegedly embezzling and misusing company money, and auto-services provider GoMechanic, which faced allegations of revenue inflation. The BharatPe case is pending and the people it sued have denied wrongdoing, while a GoMechanic founder has stated management “made errors in judgment as we followed growth at all costs.”

Sequoia Capital’s regional arm early this year started auditing its startup investments after such lapses rose, and this month, the US venture capital giant split off the unit into a separate firm.

Meanwhile, Prime Minister Narendra Modi’s push to make India a tech powerhouse is gaining traction on many other fronts — global firms from Apple Inc. to Samsung Electronics Co. are moving manufacturing to the country, while internet leaders Meta Platforms Inc. and Google are after its hundreds of millions of online users.

There are few signs, however, that startups are yet benefiting from that trend. A sudden decline in tech valuations last year, coupled with rising interest rates and slowing economies, caused venture capital firms to push the brakes on new funding rounds, with emerging markets like India getting hit hard.

For Byju’s, adding to that challenge was a sudden slowdown in demand for online education services. While signups jumped during the pandemic, India’s cost-conscious consumers were quick to curb spending on its services once schools, universities and offices reopened. Some moved to cheaper rivals.

Cut-throat competition in India’s consumer market is an all-too-familiar problem for Apoorva Mishra, founder of Dusminute, whose app connects apartment-complex residents and office tenants with electricians and plumbers and lets users order groceries. After relentless discounting by rivals made it hard to retain customers, the company decided to shut down and lay off its 200 workers late last year — only to be saved at the last moment by a group of angel investors.

“The lack of loyalty is primarily because of the hyper-competitive space,” Mishra said. “There’s always five other people who are saying that I’ll do this job for 50 rupees less.”

The additional funding helped Dusminute survive. It has now increased its staff to 250 people and expects to break even an an adjusted basis in July, he said. His company has raised about 240 million rupees ($3 million) and is confident it can soon raise a further 120 million rupees as investors focus more on profitability and not just growth.

Disappointing high-profile market debuts, many of which were criticized as overpriced at the height of the boom, have also had an adverse impact on India’s startup ecosystem. Digital payments giant Paytm went public in one of the most disastrous IPOs of all time in 2021, and still languishes at 60% below its offer price as it struggles to reverse losses.

Two other prominent IPOs, delivery provider Zomato and online insurance marketplace Policybazaar — both contenders in India’s competitive consumer internet market — have fared better but are still down about 50% from their highs. Like Paytm, the firms are still working to reach break-even.

The boards of many newly listed companies did a poor job pricing their IPOs, and investors have been disappointed by their slow progress toward profitability since their debuts, said Pranav Pai, the founding partner at Bangalore-based venture firm 3One4 Capital. Many companies have only recently turned their attention to earnings to convince investors of their future prospects, he said.

“An IPO is not the end of the road — it’s the start of a very different journey where a company begins delivering results for its shareholders in public markets,” Pai said. “They’ve all learned this truth now.”

What’s followed is a significant decline in the size of Indian market debuts. Indian IPOs have raised just over $2 billion this year, a drop of 61% from the same period last year, even as the number of IPOs increased.

That’s prompted venture capital firms and other major investors to reduce the estimated values of their startup holdings. Softbank Group Corp.-backed delivery firm Swiggy and ride-hailing provider Ola have seen their valuations reduced. Oyo Hotels, once touted as a revolutionary force in the hotel industry, has dropped by almost 80%. Just this week, Prosus NV cut its view on Byju’s valuation by 15%, pegging it at just $5.1 billion.

To be sure, there are many aspiring startups still seeking to break through in India. Dozens of unicorns are working to survive through the downturn and emerge as successes in the future. Several of them are close to an IPO, according to Pai at 3One4 Capital.

To win over investors, those upstarts need to have more realistic IPO valuations than the companies that listed a year or two ago, Pai said. They should have clearer paths toward profitability and avoid overpaying for acquisitions, he said.

“Startups will now hesitate to overprice because the stock will be punished post listing,” Pai said. “There’ll be a lot more respect for capital in the process.”

Even with the recent venture turmoil, the long-term opportunity in India remains attractive, Bejul Somaia, a partner at Lightspeed Venture Partners, said in an essay posted on Twitter this month. It’s already the world’s largest digital market after the US and China, and more value will be created as the country’s services go online, he said. But to seize the opportunity, founders and investors need to be disciplined, patient and prepared to play the long game, said Somaia, whose firm holds $3.4 billion in Indian assets.

“India is not for the faint hearted,” Somaia said. “But India is worth it.”

--With assistance from Saritha Rai, Menaka Doshi, Rishaad Salamat, Filipe Pacheco and Loni Prinsloo.

Xi Vows to Protect Foreign Investors in Charm Offensive

Bloomberg News
Wed, June 28, 2023 

(Bloomberg) -- Chinese leader Xi Jinping pledged that his nation would do right by foreign investors, underscoring his government’s attempts to assuage worries about the economy and unpredictable policymaking.

“Development is the top priority of the Communist Party of China in governing and rejuvenating the country,” Xi told New Zealand Prime Minister Chris Hipkins during his official visit to Beijing on Tuesday.

“We will continue to vigorously promote high-level opening up and better protect the rights and interests of foreign investors per the law,” Xi said, according to the official Xinhua News Agency.

China’s attempts to encourage foreign investors have ramped up in recent weeks as it’s become increasingly clear that the economy’s recovery following the end of Beijing’s Covid Zero policies is starting to flag. Efforts in the US and Europe to “de-risk” supply chains by reducing their reliance on China have further clouded the prospects for future growth.

At a “Summer Davos” dialog in Tianjin on Tuesday, Chinese Premier Li Qiang told 120 entrepreneurs from around the world that his nation was willing to work with them, Xinhua reported.

Li also delivered a speech at that economic forum warning that attempts by governments to politicize their economies would only fragment the world, and recently returned from a trip to Germany where he urged CEOs there to to take the lead on risk-proofing their supply chains.

“Pushing the decision-making to companies, instead of foreign governments, is seen as the lesser of the evils by Chinese policymakers,” said Andy Chen, senior analyst with consultancy Trivium China.

“With companies in the driving seat, Chinese policymakers could have more points of access to influence the decision-making and make it worthwhile for companies that choose to more narrowly define areas to derisk.”

Meanwhile, Bernard Arnault, the billionaire CEO of LVMH, is making his first trip to China since the pandemic. The French entrepreneur was spotted at a high-end shopping mall in Beijing on Tuesday, the Global Times tweeted, citing photos taken circulating on a social media platform.

The itinerary for Arnault’s entourage includes meetings with local teams in several cities, people familiar with the trip have said, declining to be named discussing the billionaire’s whereabouts.

Arnault’s trip follows visits to China by other high-profile executives in recent weeks, including JPMorgan Chase & Co. CEO Jamie Dimon and Tesla Inc. head Elon Musk. Apple Inc.’s Tim Cook traveled to China in March to celebrate the iPhone maker’s ties to the region.

Besides Xi, Hipkins met the head of China’s legislature Zhao Leji as part of his visit to the Asian nation this week.

“I emphasized the key focus of our visit was to reaffirm our close economic relationship by supporting businesses renew their connections with Chinese counterparts and helping grow new ones to support New Zealand’s economic recovery,” Hipkins said in a statement after meeting the two.

Chinese firms have also stressed the importance of the government’s role in encouraging investment.

“For China to succeed as an innovation powerhouse, it is very important for Chinese tech companies to access capital markets, access private financing, without any impediments,” said Fred Hu, CEO of the Chinese investment firm Primavera Capital, in an interview with Bloomberg Television at the forum in Tianjin.

Hu said his firm hasn’t so far had any issues performing due-diligence, though the firm is paying close attention to recent crackdowns.

A clampdown this year on foreign consultancy firms that help global investors and multinational firms understand China — part of a nationwide anti-espionage campaign — has weakened the appetite for investment from overseas firms.

That campaign and other government actions likely mean that China’s charm offensive will face skepticism. While Xi has repeatedly insisted that economic development is the Communist Party’s “top priority,” his government has clearly made protecting national security a central focus.

Prior to the consultancy crackdown, abrupt regulatory tightening moves affecting industries ranging from technology to real estate had already been sending foreign capital fleeing from the nation’s financial markets.

A record share of European companies say doing business in China is getting more difficult, according to a recent survey that noted some firms are already following through on plans to divest from the economy. Some American firms have also reconsidered investment.

--With assistance from Lucille Liu, Ka Ho Cheuk and Stephen Engle.

China Lures Billionaires Into Race to Catch US in AI


Jane Zhang and Sarah Zheng
Tue, June 27, 2023 

 

 

(Bloomberg) -- China’s tech sector has a new obsession: competing with US titans like Google and Microsoft Corp. in the breakneck global artificial intelligence race.

Billionaire entrepreneurs, mid-level engineers and veterans of foreign firms alike now harbor a remarkably consistent ambition: to outdo China's geopolitical rival in a technology that may determine the global power stakes. Among them is internet mogul Wang Xiaochuan, who entered the field after OpenAI’s ChatGPT debuted to a social media firestorm in November. He joins the ranks of Chinese scientists, programmers and financiers — including former employees of ByteDance Ltd., e-commerce platform JD.com Inc. and Google — expected to propel some $15 billion of spending on AI technology this year.

For Wang, who founded the search engine Sogou that Tencent Holdings Ltd. bought out in a $3.5 billion deal less than two years ago, the opportunity came fast. By April, the computer science graduate had already set up his own startup and secured $50 million in seed capital. He reached out to former subordinates at Sogou, many of whom he convinced to come on board. By June, his firm had launched an open-source large language model and it’s already in use by researchers at China’s two most prominent universities.

“We all heard the sound of the starter pistol in the race. Tech companies, big or small, are all on the same starting line,” Wang, who named his startup Baichuan or “A Hundred Rivers,” told Bloomberg News. “China is still three years behind the US, but we may not need three years to catch up.”

The Tech Behind Those Amazing, Flawed New Chatbots: QuickTake

The top-flight Chinese talent and financing flowing into AI mirrors a wave of activity convulsing Silicon Valley, which has deep implications for Beijing’s escalating conflict with Washington. Analysts and executives believe AI will shape the technology leaders of the future, much like the internet and smartphone created a corps of global titans. Moreover, it could propel applications from supercomputing to military prowess — potentially tilting the geopolitical balance.

China is a vastly different landscape — one reined in by US tech sanctions, regulators’ data and censorship demands, and Western distrust that limits the international expansion of its national champions. All that will make it harder to play catch-up with the US.

AI investments in the US dwarf that of China, totaling $26.6 billion in the year to mid-June versus China’s $4 billion, according to previously unreported data collated by consultancy Preqin.

Yet that gap is already gradually narrowing, at least in terms of deal flow. The number of Chinese venture deals in AI comprised more than two-thirds of the US total of about 447 in the year to mid-June, versus about 50% over the previous two years. China-based AI venture deals also outpaced consumer tech in 2022 and early 2023, according to Preqin.

All this is not lost on Beijing. Xi Jinping’s administration realizes that AI, much like semiconductors, will be critical to maintaining China’s ascendancy and is likely to mobilize the nation’s resources to drive advances. While startup investment cratered during the years Beijing went after tech giants and “reckless expansion of capital,” the feeling is the Party encourages AI exploration.

It’s a familiar challenge for Chinese tech players.

During the mobile era, a generation of startups led by Tencent, Alibaba Group Holding Ltd. and TikTok-owner ByteDance built an industry that could genuinely rival Silicon Valley. It helped that Facebook, YouTube and WhatsApp were shut out of the booming market of 1.4 billion people. At one point in 2018, venture capital funding in China was even on track to surpass that of the US — until the trade war exacerbated an economic downturn. That situation, where local firms thrive when US rivals are absent, is likely to play out once more in an AI arena from which ChatGPT and Google’s Bard are effectively barred.

Large AI models could eventually behave much like the smartphone operating systems Android and iOS, which provided the infrastructure or platforms on which Tencent, ByteDance and Ant Group Co. broke new ground: in social media with WeChat, video with Douyin and Tiktok, and payments with Alipay. The idea is that generative AI services could speed the emergence of new platforms to host a wave of revolutionary apps for businesses and consumers.

That’s a potential gold mine for an industry just emerging from the trauma of Xi’s two-year internet crackdown, which starved tech companies of the heady growth of years past. No one today wants to miss out on what Nvidia Corp. CEO Jensen Huang called the “iPhone moment” of their generation.

“This is an AI arms race going on both in the US and China,” said Daniel Ives, a senior analyst at Wedbush Securities. “China tech is dealing with a stricter regulatory environment around AI, which puts one hand behind the back in this ‘Game of Thrones’ battle. This is an $800 billion market opportunity globally over the next decade we estimate around AI, and we are only on the very early stages.”

The resolve to catch OpenAI is apparent in the seemingly haphazard fashion in which incumbents from Baidu Inc. and SenseTime Group Inc. to Alibaba have trotted out AI bots in the span of months.

Joining them are some of the biggest names in the industry. Their ranks include Wang Changhu, the former director of ByteDance’s AI Lab; Zhou Bowen, ex-president of JD.com Inc.’s AI and cloud computing division; Meituan co-founder Wang Huiwen and current boss Wang Xing; and venture capitalist Kai-fu Lee, who made his name backing Baidu.

Ex-Baidu President Zhang Yaqin, now dean of Tsinghua University’s Institute for AI Industry Research and overseer of a number of budding projects, told Chinese media in March that investors sought him out almost daily that month. He estimates there’re as many as 50 firms working on large language models across the country. Wang Changhu, former lead researcher at Microsoft Research before he joined Bytedance in 2017, said dozens of investors approached him on WeChat in a single day when he was preparing to set up his generative AI startup.

“This is at least a once-in-a-decade opportunity, an opportunity for startups to create companies comparable to the behemoths,” Wang told Bloomberg News.

Many of the fledgling firms are squarely aimed at the home crowd, given growing concern in the West about Chinese technology. Even so, there’s an open field in a consumer market ringfenced to themselves, which also happens to be the world’s largest internet arena. In the works are AI-fueled applications, from a chatbot to help manufacturers track consumption trends, to an intelligent operating system offering companionship to counter depression, and smart enterprise tools to transcribe and analyze meetings.

Still, Chinese demos so far make it clear that most have a long way to go. The skeptical point out true innovation requires the free-wheeling exploration and experimentation that the US cultivates but is restrained in China. Pervasive censorship in turn means the datasets that China’s aspirants are using are inherently flawed and artificially constrained, they argue.

“Investors are chasing the concept,” said Grant Pan, chief financial officer of Noah Holdings, whose subsidiary Gopher invests in over 100 funds including Sequoia China (now HongShan) and ZhenFund in China. “However, the commercial use and impact to industry chains are not clear yet.”

Then there are Beijing’s regulations on generative AI, with its top internet overseer signaling that the onus for training algorithms and implementing censorship will fall on platform providers.

“Beijing’s censorship regime will put China’s ChatGPT-like applications at a serious disadvantage vis-à-vis their US peers,” said Xiaomeng Lu, director of the Eurasia Group’s geotechnology practice.

Last but not least, powerful chipsets from the likes of Nvidia and Advanced Micro Devices Inc. are crucial in training large AI models — but Washington bars the most capable from the country. The Biden administration is now considering tightening restrictions as soon as in coming months, essentially eliminating less-capable chips that Nvidia has devised for Chinese customers, the Wall Street Journal reported, citing anonymous sources.

But these hurdles haven’t stopped the ambitious in China, from Baidu and iFlytek Co. to the slew of new startups, from setting their sights on matching and surpassing the US on AI.

Executives, including from Tencent, argue models can tack on more chipsets to make up for lesser performance. Baichuan’s Wang said it got by with Nvidia’s A800 chips, and will obtain more capable H800s in June.

Others like Lan Zhenzhong, a veteran of Google’s AI Research Institute who founded Hangzhou-based Westlake Xinchen in 2021, employ a costly hybrid approach. The Baidu Ventures-backed company uses fewer than 1,000 GPUs for model training, then deploys domestic cloud services for inference, or sustaining the program. Lan said it cost about 7 to 8 yuan per hour to rent an A100 chip from cloud services: “Very expensive.”

Billionaire Baidu founder Robin Li, who in March unfurled China’s first answer to ChatGPT, has said the US and China both account for roughly a third of the world’s computing power. But that alone won’t make the difference because “innovation is not something you can buy.”

“Why aren’t people willing to invest in the longer-term and dream big?” asked Wayne Shiong, a partner at China Growth Capital. “Now that we’ve been handed this assignment by the other side, China will be able to play catch-up.”

--With assistance from Zheping Huang and Vlad Savov.

(Updates with potential new US curbs on AI chips in the 24th paragraph)

Most Read from Bloomberg Businessweek

Threatened by shortages, electric car makers race for supplies of lithium for batteries

The Canadian Press
Wed, June 28, 2023 


BEIJING (AP) — Threatened by possible shortages of lithium for electric car batteries, automakers are racing to lock in supplies of the once-obscure “white gold” in a politically and environmentally fraught competition from China to Nevada to Chile.

General Motors Co. and the parent company of China’s BYD Auto Ltd. went straight to the source and bought stakes in lithium miners, a rare step in an industry that relies on outside vendors for copper and other raw materials. Others are investing in lithium refining or ventures to recycle the silvery-white metal from used batteries.

A shortfall in lithium supplies would be an obstacle for plans to ramp up sales to tens of millions of electric vehicles a year. It is fueling political conflict over resources and complaints about the environmental cost of extracting them.

“We already have that risk” of not being able to get enough, GM’s chief financial officer, Paul A. Jacobson, said at a Deutsche Bank conference in mid-June.

“We’ve got to have partnerships with people that can get us the lithium in the form that we need,” Jacobson said.

Ford Motor Co. has signed contracts stretching up to 11 years into the future with lithium suppliers on two continents. Volkswagen AG and Honda Motor Co. are trying to reduce their need for freshly mined ore by forming recycling ventures.

Global lithium output is on track to triple this decade, but sales of electric SUVs, sports cars and sedans that rose 55% last year threaten to outrun that. Each battery requires about eight kilograms (17 pounds) of lithium, plus cobalt, nickel and other metals.

“There will be a shortage of EV battery supplies,” said Joshua Cobb, senior auto analyst for BMI.

Adding to uncertainty, lithium has emerged as another conflict in strained U.S.-Chinese relations.

Beijing, Washington and other governments see metal supplies for electric vehicles as a strategic issue and are tightening controls on access. Canada ordered three Chinese companies last year to sell lithium mining assets on security grounds.

Other governments including Indonesia, Chile and Zimbabwe are trying to maximize their return on deposits of lithium, cobalt and nickel by requiring miners to invest in refining and processing before they can export.

GM is buying direct access to lithium by investing $650 million in the Canadian developer of a Nevada mine that is the biggest U.S. source. In return, GM says it will get enough for 1 million vehicles a year.

Conservationists and American Indians are asking a federal court to block development of the Nevada mine, which the Biden administration has embraced as part of its clean energy agenda. Opponents say it might poison water supplies and soil and pollute nesting grounds for birds.

Despite rising output, the industry may face shortages of lithium and cobalt as early as 2025 if enough isn’t invested in production, according to Leonardo Paoli and Timur Gul of the International Energy Agency.

“Supply side bottlenecks are becoming a real challenge,” Paoli and Gul said in a report last year.

Automakers might be putting in their own money to reassure “notoriously risk-averse” miners, according to Alastair Bedwell of GlobalData. He said miners are reluctant to “go all out” on lithium until they are sure the industry won’t switch to batteries made with other metals.

Even if they do, developing lithium sources is a yearslong process.

Worldwide lithium resources are estimated at 80 million tons by the U.S. Geological Survey.

Bolivia’s are the biggest at 21 millions tons, followed by Australia with 17 million and Chile with 9 million.

Forecasts of annual production range as high as 1.5 million tons by 2030. But demand, if EV sales keep rising at double-digit annual rates, is forecast to increase to up to 3 million tons.

EV sales took off in 2021, more than doubling over the previous year to 6.8 million, according to EV Volumes, a research firm. Last year’s sales rose to 10.5 million.

China accounted for 60% of last year’s sales, two-thirds of production and three-quarters of battery manufacturing.

President Joe Biden last year announced an official goal for half of all new cars sold in the United State to be electric or other zero-emissions technology by 2030.

As sales rise, so does official anxiety, especially in Washington and Beijing, about access to lithium and other minerals and the potential for strategic competition.

Volkswagen’s battery unit, PowerCo, signed an agreement with Canada last August to develop suppliers of “critical raw materials” including lithium, cobalt and nickel.

The German chancellor, Olaf Scholz, in a statement welcomed cooperation with “close friends” on “raw material security.”

China’s government has accused the United States, Canada, Japan and other governments of misusing phony security concerns to hurt Chinese competitors in electric cars, smartphones, clean energy and other emerging technologies.

Other governments welcome Chinese investment. China’s biggest lithium producer, Ganfeng Lithium Co., bought Argentina’s Lithea Inc. last year for $962 million.

About two-thirds of the world’s lithium comes from mines. That involves crushing rock and using acids to extract metals. It leaves toxic heaps of chemical-laced tailings.

The rest is extracted from salt lakes or salt flats. That can require vast evaporation ponds.

The industry is working on technology to extract lithium from hot springs and clay deposits with less environmental impact.

As they ramp up supplies, automakers face another bottleneck: Lack of refining capacity to purify raw lithium into battery material.

Tesla Inc. is building a refinery in Texas. Others including BMW AG are buying stakes in refiners.

As for GM, “I don’t know” whether it will build its own refinery, Jacobson said.

Joe Mcdonald, The Associated Press