With Fossil Fuel Bans, E-cars Shift into Higher Gear

AFP September 11, 2017

Frankfurt am Main (AFP) – Beijing’s announcement that it is considering joining France and Britain in banning petrol and diesel cars from its smog-clogged roads promises to accelerate a push towards electric vehicles — a race in which Chinese carmakers have everything to gain.

As the global auto industry braces for a shake up, here’s what you need to know.

– What’s it all about? –
While France and Britain have said they plan to outlaw sales of new diesel and petrol cars by 2040, Beijing has not yet set a date for its proposed ban.

But if China, the world’s largest car market, turns its back on fossil-fuel powered cars, it could change the auto industry forever.

With annual sales of some 24 million vehicles, China is home to one in every four new cars on the planet. By 2024, analysts at AlixPartners forecast sales will climb to 42 million annually, accounting for 36 percent of the global market.

By comparison, France and Britain each record sales of some two million new cars per year.

“If China says no more ICE (internal combustion engine), the rest of the world will follow because the rest of the world can’t lose China’s market. It’s too big,” says Bill Russo, managing director of Gao Feng Advisory Group in Shanghai.

The mooted driving bans promise to be a hot topic of discussion at the Frankfurt International Motor Show (IAA) this week, Europe’s top industry showcase.

– What does it mean for carmakers in China? –
By law, foreign carmakers are required to team up with Chinese companies if they want to do business in the country.

With China also mulling quotas for electric vehicles — another move that could jolt the industry, traditional auto giants from Europe, the United States and Japan have no time to waste in expanding their ranges of hybrid and electric cars, experts say.

“European carmakers will have to step up their efforts in electric vehicles if they don’t want to be chased out of the market, because their current offerings are insufficient,” says analyst Stefan Bratzel, head of Germany’s Center of Automotive Management.

Electric cars only account for 1.7 percent of total sales in China at the moment, but spurred by government incentives the figure has been growing steadily and could skyrocket in coming years.

Chinese carmakers have bet big on the cleaner engines of the future, and account for 96 percent of electric vehicles sold in the country — compared to a market share of just 43 percent in the traditional car sector.

Anticipating the industry revolution, Chinese firms already dominate the production of electric motors and batteries. “This poses a real problem for the European industry,” says Laurent Petizon of AlixPartners.

The era of the combustion engine “will end on a time schedule where China can assure itself that its own domestic carmakers are capable of delivering the solution they would like to see on the road,” Russo predicts.

– Is this good news for the environment? –
Not necessarily. While pedestrians and cyclists in pollution-plagued mega-cities may breathe easier around the purring of electric cars, how ‘green’ the vehicles are depends on how clean the manufacturing process was.

In China, fossil fuel plants with their climate-altering carbon emissions still power the bulk of the country’s factories.

Promising to clean up its act, the government has said it wants 20 percent of Chinese power consumption to come from low-emission energy by 2030, up from 11 percent currently.

In France, which derives 75 percent of its energy from nuclear power, a massive switch towards electric cars would theoretically translate in a significant reduction of harmful carbon emissions.

Any electric car boom will also bring scrutiny to the environmental footprint of battery production, from the extraction of raw materials like lithium to the complex recycling of toxic components.


FT | China’s Carmakers Develop an Appetite for Foreign Markets

September 14, 2017 by Charles Clover

The improved quality of the country’s vehicles will boost chances of success

Cracking export markets in Europe and the US is the next frontier for China’s global-minded carmakers. Next year, for example, Geely Automobile, based in Zhejiang, will start sales of its Lynk & Co brand in Europe after launching in China later this year.

Rival Chinese automaker Great Wall already sells a diesel pick-up truck in Italy, and plans to ramp up sales as well. This month, it made its global ambitions clear when it announced it would like to acquire Fiat Chrysler’s Jeep brand, though no formal discussions have started. Great Wall is also building a full assembly plant in Russia scheduled to open in 2018.

Chery is currently the biggest Chinese auto exporter, mainly to emerging markets, while Great Wall has the most experience exporting to developed markets, notably Australia, though volumes are quite low, says Janet Lewis, head of transport at investment bank Macquarie in Tokyo. GAC Trumpchi, the highest rated Chinese brand for quality, according to consultancy JD Power, plans to launch exports to the US in either 2018 or 2019.

All see conquering the top international markets as the route to becoming truly global. “Chinese brands are where the Japanese were in the 1960s and 1970s, or where Korean brands were in the 1970s or 1980s,” says Bill Russo managing director of Gao Feng Advisory in Shanghai.

Chinese automakers have long been reluctant to export. The country became the world’s largest car market in 2009, with some of the fattest margins on car sales, and Chinese brands have privileged access. Many have joint ventures with international companies that manufacture in China, giving the Chinese partners access to technology as well.

Going abroad means fighting tooth and nail for comparatively thin margins against the likes of Volkswagen and Hyundai, and some brands prefer to consolidate their markets at home before venturing abroad. Compared to the 28m Chinese vehicles produced in 2016, total vehicle exports were 810,000 units, including trucks and buses. The five vehicle exporters were SAIC, Chery Automobile, BAIC Group, Brilliance Automotive and Anhui JAC.

Another reason for the reluctance to export is based on experience. The first wave of Chinese exports to western markets in 2005-2006 was a disaster. Chinese cars were at that point unable to pass stringent emissions and safety tests. Geely even appeared at the Detroit auto show in 2006, but its “China Dragon” car failed to take off, while Brilliance, the Shenyang-based carmaker, sold just 968 cars in Europe from 2007 to 2011, according to Jato Dynamics, after originally planning to ship 158,000 sedans there.

However, a decade later, the appetite for exporting has returned. GAC Trumpchi appeared at this year’s Detroit auto show and announced it would start exporting to the US next year. Geely likewise has chosen 2018 as the year it will test European markets with its Lynk brand.

Much has changed in 10 years. First, Chinese cars have vastly improved in quality. According to data from the Initial Quality Study by JD Power, the quality gap between Chinese and foreign brands in 2005 was yawning.

JD Power measured 380 problems per 100 Chinese-branded vehicles that year against 193 for international mass-market brands. By 2016, Chinese brands had 112 problems per 100 vehicles compared to an even 100 for international brands. “Made in China” is no longer the mark of bad quality it once was. Chinese factories already export Buicks and Volvos to the US market, while Ford will move global production of the Focus to the country in 2019. And Chinese Hondas are sold in Europe.

Cross-pollination with international brands has benefited China. Geely is buttressed by its 2010 purchase of Volvo and its Lynk and Volvo brands share technology platforms. Lynk cars could theoretically be made at Volvo plants in Europe or in China.

But one thing Chinese carmakers lack is the brand power that western carmakers have accumulated through decades of global experience.

Chinese brands are still forced to compete on cost, and lowering prices is nearly impossible for small volumes of exports to the top global markets owing to the cost of testing and meeting emissions and safety rules. For example, the prices Great Wall charges in Italy are not much lower than competitors such as VW and Hyundai.

But exporting is nonetheless identified by quite a few Chinese brands as an important strategy. Many are bumping up against growing competition in the crowded Chinese market, where 46 local brands now struggle against each other and international carmakers. Most analysts suspect that consolidation of the industry will eventually result in five or six large Chinese brands becoming national champions.

“We have already seen growing consolidation of brands and that will be a growing trend,” said Zhu Huaron, president of Chang’an Automobile, one of China’s largest domestic carmakers, during a conference in Chongqing in June. He is one of those who thinks that, eventually, China’s domestic brands will be reduced to five.

In that struggle for primacy, exports will be essential, says Macquarie’s Ms Lewis. “Exports are absolutely critical to get to the volume levels — several million — that are likely to be necessary to remain viable as a global automotive company.”


BYD’s First-half Profits Slide as Green Car Subsidies Cut

Norihiko Shirouzu
August 28, 2017

BEIJING (Reuters) – Chinese automaker BYD Co Ltd (002594.SZ)(1211.HK), backed by U.S. investor Warren Buffett, said on Monday net profit fell sharply for the first half of the year, as Beijing reins in subsidies and other policy support for green energy cars.

The Shenzhen-based manufacturer, which has invested heavily in making battery electric and plug-in hybrid vehicles, posted net profit of 1.72 billion yuan ($259.9 million) for the January-June period, behind analyst estimates of 1.82 billion yuan.

China, which has been aggressively promoting green vehicles to combat urban pollution, has cut back subsidies to the sector this year and imposed stricter requirements on electric carmakers after a subsidy cheating scandal in 2016.

BYD said net profits would continue to face challenges later in the year, predicting a 20.04-25.22 percent fall for the first nine months of the year due to the reduction of subsidies and increasing market competition.

BYD, which saw net profit shoot up 78.9 percent last year, said in April it expected the subsidy cuts for green vehicles to drag down first-half profits by up to 31.4 percent to between 1.55 billion and 1.8 billion yuan.

BYD’s overall vehicle sales, those of gasoline cars and electric battery plug-in vehicles, fell 14.8 percent to 183,637 vehicles in January-June compared to the same period last year, according to Shanghai-based consultancy Automotive Foresight.

Yale Zhang, head of Automotive Foresight, said BYD’s new-energy vehicle (NEV) sales volume had been “basically flat”, while petrol engine car sales had fallen faster.

Bill Russo, managing director at consultancy Gao Feng Advisory Co, added BYD could benefit from a broader green transport push into monorail, buses and batteries, as well as supportive policies including an NEV credit scheme.

“We have seen a sales recovery trend for BYD during the past few months, especially in Q2,” Russo said. “In addition, BYD is pushing green public transportation in China and globally.”

Reporting by Norihiko Shirouzu in BEIJING and Twinnie Siu in Hong Kong; Editing by Adam Jourdan and Dale Hudson



文 | 谢祖墀,王金千
编译 | 新智元
曾被视为技术落后的中国,如今将 AI 视为超越国际竞争对手的契机
《经济学人》数据显示,2012 到 2016 年期间,中国的 AI 企业获得的政府资助为26亿美元,美国企业则高达179亿美元,但情势迅速发生了转变。曾被视为技术落后的中国,如今将 AI 视为超越国际竞争对手的契机。
在全球 2015 年发表的顶尖 AI 学术论文中有超过40%包含有一名或多名中国作者。2010年到2014年减,中国的 AI 技术相关专利申请增长了 186%,相比较于前一个五年是一个极大的飞跃。与此同时,近两年 ImageNet Large Scale Visual Recognition Challenge 中成绩优异的团队均为中国团队,其中半数以上都植根于中国本土。
《中国制造2025》、《“互联网+”人工智能三年行动实施方案》及《新一代人工智能发展规划》等政策均致力于推动中国 AI 技术的发展。
中国多个省份及城市也纷纷出台优惠政策及丰厚的政府资助,扶植 AI 初创企业。以沈阳为例,该市投资人民币 200 亿元重点发展机器人技术开发项目。
这些优惠政策促进了小规模企业及大型互联网企业共同的技术创新。产业巨头如百度、阿里巴巴及腾讯,初创企业如旷视科技、碳云智能、出门问问及商汤科技,另有滴滴出行及小米等独角兽企业,均大力投入 AI 技术的研发。

例如,百度开发的应用神经网络的机器翻译系统,其语音识别准确率已超过人类,他们同时发布了自动驾驶解决方案的开源平台,命名为“阿波罗计划”,推动自动驾驶技术的研发。腾讯也建立了自己的 AI 实验室,汇集全球顶尖的 50 名科学家、研究人员及专家,提出“内容 AI,社交 AI 及游戏 AI”的目标。今年早些时候,腾讯开发的机器人“绝艺”击败了日本围棋高手 Ryo Ichiriki。
专注于计算机视觉技术的旷视科技在《麻省理工科技评论》评选的2017年50家“全球最聪明企业”中名列第11位,其面部识别产品 Face++已为全球一亿人刷了脸。科大讯飞的智能语音识别及自然语言处理技术为全球领先,这家市值已达到约120亿美元企业的语音识别技术甚至可分辨中文中的方言。
在学术领域的 AI 研究已经从少数顶尖中国高校拓展到全国。在活力充沛的学术环境下,中国研究人员可以同时汲取中文及英文的各类资源。大批的理工科专业毕业生投身 AI 产业。中国互联网及智能手机的用户基数向 AI 学习算法提供了巨大数量的有价值的训练数据。
相比较外国同侪而言,对于大量行为模式及日常数据的获取使得中国的 AI 研究者们能够以更高的速度及密度进行更大规模的学习和实验。
中国完全有能力成为全球 AI 领导者。但要实现这一目标,政府、学术界及产业界均需要转变思维模式。

迄今为止,突破性的技术创新仍主要在西方国家中产生,科技及基础建设是推动AI 技术的关键。中国的学术界则多注重现有技术的全新应用,这也是中国政府一贯以来奖励实际研发成果做法导致的结果。AI 相关基础科学的研究耗时更长且并无保障。
中国的企业擅长迅速在市场上推出新产品和产品的新特性,因为长期以来他们对新商机的把握已得心应手。和学术界的状况类似,中国企业也停留在已有技术的应用阶段,而不是自主研发新技术。目前状况下,如推动了谷歌 AlphaGo 那种基础科学研究的激励并不存在。
如想成为全球 AI 领导者,中国必须实现基础性的转变。对于新技术而不是新应用应投入更多关注。所带来的挑战会在于,中国政府要重新考量政府资助、研究提案及研究计划所带来的影响的审议标准。

一份五角大楼的报告中称,中国企业在过去6年间向美国的 AI 初创企业投资达7亿美元,但美国国防部视之为针对美国国家安全的潜在威胁,并建议美国政府对此类投资予以禁止。
为实现于2030年前成为全球 AI 领导者的目标,中国需要采取以下两个措施:第一,改革奖励机制,鼓励产业界及学术界研发新的AI 技术;第二,政府及产业界共同致力于将中国学术界发展成为全球 AI 研究领域的基石。
吴恩达曾将 AI 比喻为新电力,称其改变的不是一个领域,而是整个世界。
AI 可以,并且已经被应用于各个领域,为激活新的商业模式创造了前所未有的机会。AI 时代的资源也更加开放。企业原有的竞争力也许一夜之间就被跨领域的理念及技术融合所摧毁。
中国会成为全球AI领导者吗?这需要时间。但是正如在当今所有技术创新相关的领域一样,在 AI 领域无法忽视中国的力量。
谢祖墀博士 (Dr. Edward Tse) 是高风管理咨询公司(Gao Feng Advisory Company)的创始人兼首席执行官。中国管理咨询业的先行者。著有《China’s Disruptors》一书。

王金千(Jackie Wang)是高风咨询公司咨询顾问。


SCMP | Intelligent Future

By Edward Tse and Jackie Wang
UPDATED : Sunday, 27 August, 2017, 7:41pm

Edward Tse and Jackie Wang say China is more than capable of reaching its goal of global AI leadership, but it will require a change in mindset to carry out and support groundbreaking research, not just follow existing technology

In the past few years, China has dived head first into artificial intelligence (AI) research, with the goal of becoming the de facto world leader in this game-changing technology.

According to The Economist, from 2012 to 2016, Chinese AI companies received US$2.6 billion in funding while US peers received US$17.9 billion, but this is quickly changing. China, earlier seen as a technology development laggard, is now grasping AI as an opportunity to leapfrog foreign peers.

Over 40 per cent of the top AI-related academic papers published worldwide in 2015 had at least one or more Chinese researchers. Chinese AI-based patent applications grew 186 per cent between 2010 and 2014, a huge increase from the previous five-year period. Also, in the past two years, all the top-performing teams in the ImageNet Large Scale Visual Recognition Challenge, an influential AI computer vision contest, were Chinese, while half the teams were Chinese-based.

Source: Baidu

Beijing’s declared goal for Chinese companies to become global leaders in AI technology by 2030 sets the stage. This goes hand in hand with China’s latest five-year plan, which defines science and technology research as a strategic priority.

Policies such as “Made in China 2025”, the “three-year guidance for internet plus AI plan”, and the “new generation AI development plan” all aim to take the nation’s AI technology forward.

Various Chinese provinces and cities are also offering preferential policies and generous financial ¬incentives to AI start-ups. For example, the city of Shenyang has set up an investment fund of 20 billion yuan (HK$23.4 billion), focusing on robotics development.

These favourable policies have inspired innovations from both smaller firms and internet giants in China. Leading players such as Baidu, Alibaba and Tencent, rising start-ups like Megvii, iCarbonX, Mobvoi and SenseTime, and unicorns like Didi Chuxing and Xiaomi are all investing in or experimenting with AI technology.

Baidu, for example, has developed a cutting-edge neural-network-based machine translation system that has achieved a speech recognition accuracy higher than that of humans. It has also launched an open-source platform for autonomous driving solutions, namely Project Apollo, to speed up the ¬development of self-driving vehicles. Rival giant Tencent has also established its own AI lab, gathering 50 world-class scientists, researchers and experts to focus on “content AI, social AI and game AI”.

Its “FineArt” AI software defeated the high-ranked Japanese Go player Ryo Ichiriki earlier this year.

China’s tech titans discuss the future of AI
Ranked 11th in the MIT Technology Review’s list of the 50 smartest companies in 2017, Chinese start-up Megvii specialises in computer vision technology. Its facial recognition product, Face++, has recognised and distinguished over 100 million faces so far. iFlytek, a global leader in intelligent speech and natural language processing, has reached a market cap of around US$12 billion, and its speech recognition technology is able to differentiate between Chinese dialects.

Source: Baidu

AI research in academia has spread from being a focus at a few elite universities to those across China. Chinese academics have built a robust research community, which allows them to tap AI resources in both Chinese and English. Large numbers of Chinese science and engineering graduates are now flocking to the industry. With its large population of internet and smartphone users, China has an abundance of data, providing valuable training datasets to be fed into AI learning algorithms.

Access to large datasets of the behaviour patterns and daily lives of Chinese citizens allows AI researchers to conduct mass-scale studies and experiments, at a much higher speed and intensity than their foreign counterparts.

Artificial intelligence powers China’s tech future
China is more than capable of becoming a leader in AI. But doing so would require a change in mindset of the key stakeholders – the government, academia and business.
As of now, groundbreaking – research is still mostly being done in the West, where the focus is on the science and infrastructure behind AI technology. Chinese academics, on the other hand, tend to research new applications of pre-existing technology. This is mainly the result of the Chinese government’s ¬rewards for tangible results from research; researching the basic ¬science behind AI takes much more time and is far riskier.

Chinese companies are very good at launching new products and features quickly to the market, as they are well-versed in tapping newly identified opportunities. In the same vein as academia, Chinese companies primarily rely on new applications of pre-existing technologies rather than creating new ones. As things stand, there is little incentive for basic science research that powered AI breakthroughs like Google’s Alpha Go.

China needs a fundamental change to truly become a leader in AI. There needs to be a greater ¬emphasis on developing the ¬science behind the technology rather than emphasising new applications. This could be challenging, as the government would need to rethink the way it evaluates grants and research proposals, and the ¬defining metrics for evaluating the impact of ¬research projects.

Chinese firms, adventurous when it comes to identifying and “jumping” into new opportunities, are still underdeveloped in the “moon shot” mindset of Western firms like Microsoft or Google.

Google co-founder Sergey Brin on taking moon shots
There is also a risk due to geopolitical issues, where access to foreign technology and know-how could be cut off in the future, hampering China’s capability for a speedy transformation.

Source: Baidu

According to a Pentagon report, even though Chinese have invested over US$700 million in American AI start-ups in the past six years, the US Department of Defence views this as a potential threat to national security and wants Washington to ban such investment.

Leading foreign researchers could refuse to work with Chinese companies and academics if they believe their research will be used for “authoritarian” purposes.

To achieve the goal of becoming a global AI leader by 2030, China will need to take at least two essential steps. First, it should redraft its ¬incentives policies to motivate local companies and academics to conduct research on new AI technologies. Second, both the Chinese government and the business community should continue to nurture domestic academia to make it a cornerstone of the global AI ¬research community.

Andrew Ng, a leading American AI researcher, once said that AI would become the “new electricity” – transforming not just one industry, but all of them.

AI can be and, in fact, is already being utilised across different sectors, creating unparalleled opportunities to “activate new businesses”. Resources in the AI era are becoming more open. The competitive advantage of companies can be disrupted overnight by cross-pollination of knowledge and ideas across different sectors.

The edge for companies in the future will increasingly be data, and the ability to gain foresight, not only hindsight, from this new “mine”.

Will China be able to take global leadership in AI? Even if it can do so, it may take some time. However, like anything related to technological innovation these days, it would be imprudent to rule China out.

Edward Tse is founder and CEO of Gao Feng Advisory Company, a global strategy and management consulting firm with roots in Greater China, and author of China’s Disruptors.
Jackie Wang is a senior consultant of the firm.


新浪财经 | 谢祖墀:如何打造数万亿级企业


除了苹果、阿里巴巴和腾讯之外,还有另外四家科技公司,分别为Alphabet(谷歌的母公司),微软(Microsoft),亚马逊(Amazon)和 Facebook,这七家科技公司占了超过名单总数的一半。科技公司的价值递增速度比传统的公司来的更快,可以想象在未来这种名单上科技公司的比重将会越来越高。



最基本的一点是,这些公司都采用了一种与传统的专注核心竞争力或是多元化集团式经营战略不同的战略打法,我们称之为“战略的第三条路”。“第三条路”的主要思想是指企业面临新的发展机会时,往往在机会和现有能力之间作出有机和动态的匹配和选择。通过自建、并购或组成生态系统等多种方式弥补能力空缺,进而抓住新的机会实现延续性的跳跃式发展。例如亚马逊从最初的在线书店,到之后成为美国最大的网络零售商、推出云计算服务和Kindle等产品,打造生态系统、以及近期收购Whole Foods布局线下零售,亚马逊不断在发展中调整战略目标、评估未来机会,并通过弥补能力差距呈现出跳跃式发展。苹果、谷歌、亚马逊、阿里等亦是如此。



(2)“单客细分”(Segment of One);




尽管总用户数量极其庞大,但强大的科技能力使这些公司了解它们的每一个用户。我们把此能力称之为“单一客户的市场细分”或简称“单客细分”。亦就是说,这些公司都能清楚的知道每一个用户是谁,他喜爱什么东西和他每天的消费或工作行为习惯是什么。这种“Segment of One”的分析能力已经代替了传统以年龄、性别、收入、地区等静态和单一维度为基础的市场细分方法。

在进行单客细分之余,这些公司亦知道每一单客所属的社群。每一单客往往都同时属于多个社群,而每一个社群又代表着不同的兴趣爱好、个人追求和社交属性。这种既是个体,又是群体的洞察能力是多维和随时空转移的,通过大数据和高度算法分析的能力,这些公司对每一用户的了解已经超越了平面的简单了解,而达到了多维立体的复杂了解(sophisticated understanding)。



这些数万亿级企业在它们个别的领域已经成为绝对的领导者,甚至已经形成了“赢者通吃”(Winner takes all)的局面。但这样是否代表其他公司就再没有机会了? 是否代表这些数万亿级企业都已经强大到不能倒下?我的答案是No!




谢祖墀博士(Dr. Edward Tse)是高风管理咨询公司(Gao Feng Advisory Company)的创始人兼首席执行官。中国管理咨询业的先行者。过去的20年里,他创立并领导了两大国际管理咨询公司在大中华区的业务。外界评价他为“中国的全球领先商业战略家”和 “谢博士之于中国企业界就如大前研一之于日本企业界”。他曾为数以百计的公司(总部设在中国及其它地区)咨询过所有关键战略和管理方面的业务,涉及中国的各个方面和中国在全球的地位。他还为中国政府在战略、国有企业改革和中国企业走出国门等方面做过咨询。他已发表200多篇文章并出版了4本书,其中包括于国际获奖的《中国战略》和《创业家精神》。谢博士获得了加州大学伯克利分校工程学博士、MBA以及麻省理工学院的工程学学士、硕士。