Following discussions at the Asia-Pacific Economic Cooperation summit, a significant development occurred between US President Joe Biden and Chinese President Xi Jinping. They agreed to open a dialogue on artificial intelligence (AI), a sensitive area due to its strategic and military implications. This decision is a positive signal for China’s tech industry, potentially benefiting leading companies like Baidu, Xiaomi, and Kuaishou Technology in showcasing their AI capabilities.
Baidu is making strides in AI despite economic challenges. Although the tech sector in China is experiencing difficulties, Baidu is projected to see a 5.1% revenue increase, showing its dedication to innovation even in tough economic times. The company is navigating a complex landscape marked by a slowing economy affecting advertising revenue, and rising costs in the AI sector.
Xiaomi remains steady with its smartphone business and is showing a growing interest in AI. Its smartphone revenue is expected to decrease slightly, but this is offset by a 7.1% increase in its Internet of Things and lifestyle segment. The company’s investment in the AI startup Baichuan indicates a deeper move into AI services similar to ChatGPT. Xiaomi is also looking forward to growth in its core businesses and a potential venture into electric vehicles by 2024.
Kuaishou Technology is balancing its content algorithms and live-streaming revenue amidst economic uncertainty. The company is likely to see user growth due to improved algorithms and engaging content. However, the broader economic outlook and consumer demand in China remain areas of concern.
Other companies are also making significant strides. Trip.com’s sales doubled due to strong summer travel demand in China, despite slow outbound travel recovery. Maybank is handling funding-cost pressures well due to its high percentage of low-cost domestic deposits. Chow Tai Fook is expanding its retail network and launching exclusive products to stay competitive.
In aviation, Cathay Pacific is recovering with higher passenger volumes and ticket prices post-pandemic. The airline is planning to hire 5,000 people in 2024, though it faces competition from mainland airlines in Hong Kong. Despite these challenges, Cathay Pacific is a symbol of resilience in a transforming industry.