Is Reliance Jio is the biggest startup

Facebook's Asia offensive

And: USA are tightening export controls even further

Facebook is considering investing in Indian and Indonesian tech companies

That happened: Facebook plans to invest $ 5.7 billion in the Indian telecommunications company Jio. This would mean that the US company would acquire a stake of almost 10% in the group. It is Mark Zuckerberg's largest investment since acquiring Whatsapp in 2014.

Jio is a 100% subsidiary of the Reliance conglomerate and with around 370 million customers, after China Mobile and Vodafone, it is the third largest mobile operator in the world. The CEO of Reliance is billionaire Mukesh Ambani, one of the richest men in the world.

That is why it is important: With around 500 million Internet users, India, a country of 1.3 billion people, is one of the most promising markets in the world for tech companies. Unlike China with its strict censorship, India is comparatively open to western internet companies.

Facebook has around 250 million users in India, Whatsapp more than 400 million. For Zuckerberg, joining Jio is also an attempt to roll out a Whatsapp payment system; He also wants to enter the Indian e-commerce business through a collaboration with JioMart.

This is what we mean: Facebook's years of attempts to gain access to the Chinese market have so far been unsuccessful - and should remain so for the next few years. The US group is now planning to expand into the Far East in other countries in the region. That is conclusive, also with a view to the expansion plans of the Chinese Facebook competitor Tencent in Asia. Namely, he wants to establish his communication and payment platform WeChat more strongly abroad.

In addition to India, Facebook also takes a look at Indonesia with its 260 million inhabitants. According to a report by the Reuters news agency, the company is in talks with three local fintech companies about collaborating on a mobile payment system. Facebook is currently preparing the application process with the Indonesian financial supervisory authority, it is said.

Facebook is also said to be in talks about a possible collaboration with the Indonesian travel service platform Gojek.

Another aspect: For Mukesh Ambani and his Reliance group, the agreement with Facebook offers an opportunity to reduce the recent sharp rise in debt. Ambani has invested around $ 50 billion in building Jio alone - mostly borrowed money.


USA fear an outflow of technology to China

That happened: The US is tightening its controls on exports of technological goods with military applications. The new rule was published last Tuesday by the US Department of Commerce and is aimed primarily at China. US Secretary of Commerce Wilbur Ross had said the day before: “Certain actors in China, Russia and Venezuela have tried to circumvent US export controls and undermine American interests. We remain cautious and see to it that US technology does not fall into the wrong hands. "

That means: The new rule expands the list of goods for which US companies must apply for an export license. It also broadens the definition of “military end use” and thus gives the Ministry of Commerce more leeway. The new regulation aims at the stronger convergence of the private sector and the military in China, viewed with suspicion in Washington, which is specifically promoted under state and party leader Xi Jinping and which was named a national strategy in 2014.

US companies that want to export products and substances with potential military use to China, Russia or Venezuela now have to apply for a license from the authorities. For the US industry, for example in the currently competitive semiconductor market, this creates uncertainty. She fears that global supply chains will be severed and that the lack of sales due to the restrictions could weaken the competitiveness of American chip manufacturers.

That is why it is important: For observers, the tightening amounts to a veritable ban, because Chinese companies all have a certain proximity to the party and thus to the military, and the US Department of Commerce thus has a relatively large margin of discretion. This makes the rule a further component of the US national security strategy of 2017, in which Washington describes China as a strategic competitor. Since then, practically every aspect of the relationship between the two countries has been viewed through the lens of national security - everything has been subordinated to the competition.

This is what we mean: Not least because of the skirmishes in connection with overcoming the Corona crisis, the last remaining mutual trust within American-Chinese relations has apparently been eroded. Chinese academics and students in the USA are also suffering from the accusation by the American government that everything in China is subordinated to the development model of an authoritarian state. They are often blamed for stealing technology in the name of the Communist Party.

Particularly in the case of innovative and new technologies, it must be assumed that the competition between the two giants will intensify. Supply chains are being reconfigured, the exchange will continue to cool. For its part, China will see its confirmation that Washington wants to prevent the country from advancing. This will cause Beijing to focus even more on independence.