Red hot tensions between two Asian giants India and China is now taking a big toll upon Chinese interests in Singapore. Chinese rampant economic warfare has now turned Chinese companies into a global pariah, not just in India but across the world. Consider Singapore’s tech giant Sea’s recent decision to shun Chinese giant Tencent Holdings.
Sea wants to expand its global footprints. The e-commerce group has already launched its online platforms in Spain, France, India and Poland. However, Sea’s close ties with a Chinese firm can very well impede the company’s global ambitions. For instance, Sea’s subordinate e-commerce platform ‘Shopee’ recently faced resistance in India due to deep Chinese economic influence.
Sea scrambles to shun Chinese control
Now, Sea is avoiding that perilous route. Last March, Tencent had 23.3% voting rights in the Singaporean firm. Sea’s founder and CEO Forrest Li, along with Tencent, collectively holds 52% of the total voting power. Now, the company is making arrangements to cut Tencent’s voting share down to less than 10%. On the flip side, the CEO of the company would take control of 60% of the total voting rights.
As per a Nikkei Asia report, Sea’s market cap stood at over $180 billion at NYSE in September last year, which was by far the largest among Southeast Asia’s listed companies. Last year it launched an e-commerce service known as ‘Shopee’ in Mexico, Chile and Columbia, following its entry into Brazil in 2019. Sea is eying the Indian market too, and that’s why it is shunning Chinese influence rapidly.
Read More: Singapore becomes the first ASEAN nation to dump China and embrace Taiwan
Chinese influence impedes Sea’s global ambitions
As per Sea’s statement, recent changes in the company’s voting share are in the “best interests of the company.” Sea said in a statement, “As Sea has scaled significantly to become a leading global consumer internet company; it is in the best interests of the company in pursuing its long-term growth strategies to further clarify its capital structure through the contemplated changes.”
Also Read: Singapore bans Chinese investors
This also shows that how tech firms across the globe are now prioritizing their interests in the Indian market over China. China’s red stocks speak volumes of China’s economic miseries. Investing in China is no longer a profitable business. So, the flourishing tech market of the world’s second-most populous nation—India—is now attracting global tech firms like never before.
TFI Global earlier reported how the Singaporean government is shunning Chinese investors in the Singaporean real estate market. Chinese investors were investing frantically in Singapore, which had led to rising property prices in the city-State.
This is Singapore, decoupling from China.
Since when did Tencent ever have controlling stake in Sea Singapore? Currently Tencent is divesting its vast portfolio. On Tuesday, the company announced plans to offload more than $3 billion worth of shares in Sea, a Singaporean internet conglomerate, trimming its stake in Sea from 21.3% to 18.7% and bringing its voting rights under 10%.
The move came less than a month after Tencent decided to hand $16 million of its stock in JD.com to its shareholders. The transition would lower Tencent’s position in JD.com to around 2.3%.
Chinese e-commerce operator JD.com and Singaporean entertainment and e-commerce group Sea are some of Tencent’s most important strategic bets. Before the rise of Pinduoduo, which is also backed by Tencent, JD.com was Tencent’s main defense against Alibaba’s growing e-commerce empire. Through Sea’s video games operator Garena, Tencent-owned titles have established footprints across Southeast Asia.
Tencent made these recent divestments against a backdrop of China’s antitrust crackdown and a campaign on “common prosperity.” Speculation is thus rife that Tencent is voluntarily dismantling its ironclad alliance to be in the government’s good graces. This argument might explain Tencent’s Christmas present to shareholders — its JD.com stock distribution. In a similar answer to the government’s effort to curb big tech’s influence, Alibaba is weighing a sale of about 30% of its share in Twitter-like Weibo to a state conglomerate, Bloomberg reported last month.
Despite its willingness to reduce its influence over other tech giants, Tencent has not slowed down its overall investment pace. The 23-year-old firm has invested in over 1,200 companies to date, according to IT Juzi, a Chinese startup data aggregator. In 2021 alone, it deployed more than 130 billion yuan ($20 billion) across 278 companies, setting a record high. It remains to be seen whether Tencent will cut its influence over other major allies, including the likes of food delivery platform Meituan, video sharing site Bilibili and Pinduoduo.
Conclusion: Stop twisting around with your twisted story. I know you Indians hate China & anything Chinese. But that doesn’t give you the rights to spin your twisted tales.