The mood in China

Hi, this is Sarah reporting from Shanghai, the megalopolis Xi Jinping is said to be visiting this week. China’s tech scene is slower and qui [View in browser]( [Bloomberg]( Hi, this is Sarah reporting from Shanghai, the megalopolis Xi Jinping is said to be visiting this week. China’s tech scene is slower and quieter, a situation its president is aiming to liven up. But first... Three things you need to know today: • EU warns against [Amazon’s $1.4 billion iRobot deal]( • ByteDance cut [hundreds of jobs]( • Musk and Netanyahu [held a meeting on X]( Cautiously pessimistic A flurry of interviews this month with investors, tech workers and analysts in Shanghai left no question that, after three years of Covid Zero, the mood has turned cautious. The post-pandemic reopening boom never materialized, the property slump has taken its toll, and the US is doing its best to choke off Chinese access to advanced chips. President Xi is [in town this week](, for the first time since a bruising two-month Covid lockdown, meeting major tech firms in an effort to boost waning private sector sentiment, according to local media. Conversations on the ground, if he were to listen in, are now about cost controls, job security and how to move money or obtain permanent residency overseas. One American in Shanghai joked about a new game he likes to play: count the dwindling number of foreigners he can still see. And yet, the industry isn’t sitting still. Even if capital isn’t flowing the way it used to, venture capitalists are taking meetings and keeping a close watch on the market — and companies are hoping the relationships they build today will pay off when risk appetites return. Several Chinese VCs said that deals are happening — in artificial intelligence, electric vehicles, semiconductors and renewables — but they’re lower-profile than in years prior. For example, AESC Group, controlled by Chinese clean energy firm [Envision Group](bbg://securities/347226Z%20US%20Equity), is [considering raising]( $1.5 billion in funding. A few investors said — only half-jokingly — that they wouldn’t alert foreign journalists to promising homegrown chipmakers, for fear of putting them on the US government’s [radar](. A literal sign of tech competition could be found walking down Nanjing Road. It’s lined with billboards advertising Huawei Technologies Co.’s [Mate 60](, the new smartphone that sparked US alarm with its 5G capabilities and cutting-edge processor. There was even one right in front of a crowded Apple Inc. store. Metro stations featured splashy ads for the annual Singles’ Day shopping festival — although this year’s spending ended up [disappointing](. AI is one of the great hopes for the tech industry in China (as it is just about everywhere else). At [SenseTime Group Inc.](bbg://securities/20%20HK%20Equity)’s office in Shanghai, I played Chinese chess against a robotic arm and posed queries to the ChatGPT-like SenseChat. A Sephora concept store downtown offers AI-generated makeup looks that can be adjusted for the redness of the lipstick and face scans for a personalized skin analysis. (Mine recommended concealer for my eye bags.) Toward the end of my trip, I took the high-speed train to Hangzhou, home to [Alibaba Group Holding Ltd.](bbg://securities/BABA%20US%20Equity) The entrance of the e-commerce leader’s Xixi campus was lit up colorfully for Singles’ Day, and there were areas under construction — interesting given that the company has trimmed its workforce by more than 34,000 since December 2021. The atmosphere was subdued, in contrast to the flamboyance of big tech before the pandemic and before Xi’s tech crackdown. The company has tried to focus on AI in the wake of its surprise six-way split, but that’s been [rockier than expected](. Almost everyone I spoke to in China acknowledged the sense of disquiet that now pervades the tech sector. Stuck in a traffic jam outside Alibaba’s headquarters at 5 p.m. on a weekday, one person remarked how this would never have happened even a year ago, when the company famously endorsed a no-holds-barred overnight work culture. In this climate, perhaps, caution is the smart strategy. Steven Xia, the Shanghai-based founder of the Chinese tech consultancy Estartup, said a lot of tech workers are thinking about job security. “There’s a saying in investor circles: In the past, you should’ve invested in consumer; last year, you should’ve invested in chips; this year, you should invest in your résumé.” —[Sarah Zheng](mailto:szheng244@bloomberg.net) The big story Amazon once inspired fear in the health care industry. But the company [over-promised and under-delivered](. One to watch [Watch the Bloomberg Technology TV analysis]( of Black Friday and Cyber Monday. Get fully charged Reddit is back on the IPO path in a test of appetites for [big new public offerings](. Japan’s strongest Netflix competitor is run by [a reluctant tycoon](. “Authentic” was named word of the year after [AI and misinformation blurred reality in 2023](. More from Bloomberg Get Bloomberg Tech weeklies in your inbox: - [Cyber Bulletin]( for coverage of the shadow world of hackers and cyber-espionage - [Game On]( for reporting on the video game business - [Power On]( for Apple scoops, consumer tech news and more - [Screentime]( for a front-row seat to the collision of Hollywood and Silicon Valley - [Soundbite]( for reporting on podcasting, the music industry and audio trends - [Q&AI]( for answers to all your questions about AI Follow Us Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. Want to sponsor this newsletter? [Get in touch here](. You received this message because you are subscribed to Bloomberg's Tech Daily newsletter. If a friend forwarded you this message, [sign up here]( to get it in your inbox. [Unsubscribe]( [Bloomberg.com]( [Contact Us]( Bloomberg L.P. 731 Lexington Avenue, New York, NY 10022 [Ads Powered By Liveintent]( [Ad Choices](