In the news: Telecom Catalogue gets revised, Mogujie and Meilishuo merge and a Chinese hoverboard gets confiscated at CES 2016
January 13, 2016 | BY
Katherine JoThis week the new Classified Catalogue of Telecommunications Services was discussed, China's top fashion e-commerce sites combined and U.S. marshals raided a Chinese hoverboard booth at the Consumer Electronics Show
The Ministry of Industry and Information Technology (MIIT) issued on December 28 2015 the Classified Catalogue of Telecommunications Services (2015 Edition), which will come into effect on March 1 2016. This was last revised in 2003 and any sector to be invested in must be provided for in the Catalogue. The new version has widened the scope of internet services and recategorized certain Type I and II value-added telecom businesses. The most commercially significant amendment is the expansion of internet information businesses to five sub-categories: search engines, publishing, community platforms, real-time information exchange and protection services. The MIIT has brought cloud services and software apps into its regulatory fold as well. But it is unlikely that this increases opportunities for foreign investors in practice. Telecom will always be a key sensitive and restricted industry, and any investment made in the areas listed in this Catalogue must also be in compliance with the myriad other laws that regulate the sector, including reporting, encryption and decryption, as well as data transfer and localization requirements.
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Mogujie.com, one of China's biggest fashion-focused e-commerce services, has agreed to take over Tencent-backed competitor Meilishuo.com to form a new company valued at about $2.5 billion. The move marks yet another consolidation in the country's startup sector. The two operate platforms that cater to women's fashion and combine online shopping with social networking. This is the latest in a streak of high-profile deals among Chinese tech startups, which are under pressure from venture capital investors to consider joining forces with rivals. We have already seen M&A between leaders in taxi-hailing apps (Didi Kuaidi), Craigslist-like classifieds (58-Ganji), travel-booking sites (Ctrip-Qunar), online dating platforms (Baihe-Jiayuan) and group-buying pages (Meituan-Dianping). The trend confirms just how tight funding is, and how selective investors are, in such a competitive and rapidly-evolving industry.
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U.S. federal marshals showed up at the Consumer Electronics Show in Las Vegas last week to carry away one-wheeled skateboards on display at a Chinese company's booth. The move was a result of an effort by Future Motion, a Silicon Valley startup that said it had invented and patented a product that looks strikingly similar to the ones that were confiscated at the show. The American company consulted with its IP lawyers to put a stop to the “knockoffs”. The importance of a global IP portfolio is higher than ever as authorities in different jurisdictions are collaborating to combat counterfeiting and infringement on an international level. The lesson hasn't changed: Chinese companies that invent products to be taken overseas should be smart about registering and protecting their patents, and foreign brands that want to introduce theirs to the Chinese market should do the same.
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