Tech Giant Tencent to boost billions in investment in Germany
Frankfurt China’s tech giant Tencent reveals a plan to boost billions in investment in Germany and Europe, manifesting particular interest in small autonomous driving companies, high-end manufacturers and industrial designers in Germany. Tencent dwarfs its American rivals in terms of its investment portfolio with more than 700 investments worldwide.
Though the hunting ground in Europe is fragmented, Tencent pours more than 10 billion dollars annually in the continent with above 30 percent flowing to Germany. Tencent intends to increase the figure next year, said Tencent Cloud Europe’s President Li Shiwei in an interview with Handelsblatt, who also shoulders the duty to expand Tencent’s sphere of influence in Europe.
The multinational conglomerate, known for running the world’s biggest video games business by revenue, also regards Germany as the most promising market for its cloud service outside China, given the potential desire from big manufacturers in traditional industries to hop on the digitalization process. The new strategic forefront comes after the geopolitical conflicts between Washington and Beijing, said industry expert Rachel Liu from the analysis company IDC.
Tencent Cloud finalised its team in Frankfurt recently with less than 20 staff, however, Li Shiwei said that the company plans to create 2000 to 3000 jobs in Europe in the next three years. Back in July 2017, Tencent Cloud announced the opening of a data centre within Interxion’s campus in Frankfurt, as one of the trailblazers of Chinese cloud service providers in Europe.
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The reason Tencent Cloud is marching into the European market is ascribed to its compliance to European data regulations, enabling fast-paced game engagement for home and abroad players whilst lumping good European games into its platform. “Compared with other cloud vendors whose business scope is relatively general, Tencent Cloud’s gaming-based industrial attribute is conspicuous,” said Kevin Ji from the consulting firm Gartner.
Li Shiwei's goal is to win over German enterprises as customers, hawking the accessibility to more than one billion Chinese users active in WeChat. Tencent has already won car manufacturer BMW as a triumphal partner in China. The two knots to build a computing center in Tianjin, to develop autonomous driving solutions that fit better with the specific driving conditions in China.
However, German’s growing distrust for China’s economic motives will shadow Tencent’s ambition. Worries about Chinese investors’ snapping up Germany’s technological jewels, thus surpassing the traditional industrial powerhouse, can be seen from the industry association BDI’s tougher tone in a January report, defining China as a strategic competitor.
The federal government is considering excluding Huawei from its 5G roll-out based on cyber espionage concerns. Last December, the Ministry of Economy lowered the threshold for a foreign investment bid to be subjected to government screening from 25 percent of the shares of the German company concerned to 10 percent, particularly in listed key sectors like cloud computing service.