Facebook, Twitter and Google are reviewing their operations in China

Abandoning Hong Kong as a regional hub for operations and data storage is not an easy decision for western tech groups. Silicon Valley giants such as Facebook, Twitter and Google are reviewing their operations in response to Beijing’s sweeping new controls, but have not yet pulled out. Access to the mainland Chinese market may be too big to ignore. For Asian tech groups, however, the faster the better when it comes to making the call. South Korean Google rival Naver has quit Hong Kong — making it the first large foreign tech group to take action in response to China’s new security laws. It has relocated its data back-up centre — which has been in Hong Kong since 2016 — to Singapore. It is a good move. The consequences of leaving Hong Kong and risking Beijing’s ire are few. Most — about two-thirds — of Naver’s revenues are made in its home market. The US and Japan account for the rest. Messaging platforms including Japan-based WhatsApp competitor Line — majority owned by Naver — are a significant contributor to revenues, accounting for more than a third of total sales. China blocked Line messenger six years ago… Shares of Naver have more than doubled in the past year on expectations this trend will continue. Naver’s smart move should help ensure shares remain on an upwards trajectory. 

Lex.

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