China Unicom, Baidu to collaborate amid ownership reform

China Unicom's company logo is seen at its branch office in Beijing, China, April 21, 2016.REUTERS/Kim Kyung-Hoon/File Photo             GLOBAL BUSINESS WEEK AHEAD PACKAGE    SEARCH BUSINESS WEEK AHEAD 17 OCT FOR ALL IMAGES

 

Bloomberg

China United Network Communications and Baidu Inc. agreed to collaborate on areas ranging from mobile internet to artificial intelligence amid government plans for ownership reform of state-owned enterprises.
China United Network, the state-owned parent of Hong Kong-listed China Unicom Hong Kong Ltd., said on Wednesday it will cooperate with Baidu including on big data and basic telecommunication services. As part of the plan, Baidu will help add digital advertising and other internet-enabled tools like facial recognition to boost service levels at the mobile carrier’s more than 300,000 stores, the search engine giant said in a separate statement.
The announcement follows about a month after the National Development and Reform Commission picked China United Network, along with other five state-owned enterprises for a pilot program in mixed-ownership reform with the aim of revitalizing them. The collaboration opens up the possibility of China United Network further engaging with Baidu on reform, though any move will need government approval, said Steven Liu, an analyst at China Securities International.
“The companies may be taking initiative to explore ideas around mixed-ownership reform, as the government has provided no detailed guidance on how it should progress,” said Liu. “In other words, China United Network is offering the government some inspiration on how the reform could take shape.” Representatives at both China Unicom and Baidu declined to comment on whether Baidu will be a partner in mixed-ownership reform.
China United Network Chairman Wang Xiaochu and Baidu Chairman Robin Li both attended the signing ceremony in Beijing, the companies said in separate statements. China United Network’s unit C hina Unicom Hong Kong has a market value of $27.6 billion.
The mixed-ownership reform aims to boost efficiency of state-owned enterprises and could take place in different ways including sale of a minority stake to a private company. Private owned technology companies such as Baidu, Alibaba Group Holding Ltd. and Tencent Holdings Ltd. could be “probable” choices as a strategic investor in China Unicom, Elaine Lai, an analyst at Jefferies Hong Kong Ltd., said last month.

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