Author: Helen

China creates “impenetrable” network using quantum communications

Posted on by Helen

Chinese state media has reported that a trial of a quantum communications network in the city of Jinan has been successful, paving the way for the commercial rollout of a new “impenetrable” communications technology. The trial marks a key milestone for the viability of quantum communication, which so far has only seen small-scale applications.

The trial involved transmitting data using quantum encryption keys between nearly 200 terminals around the city. Its designers have deemed the network to be in a “very ideal” condition.

The Beijing-Shanghai link, when completed, will be the world’s longest land-based quantum communications channel

The network connects the Chinese Communist Party with government bodies in Jinan, but is part of a much larger quantum link that is still under construction between Beijing and Shanghai.

The Beijing-Shanghai link, when completed, will be the world’s longest land-based quantum communications channel. According to the People’s Daily, the tech is expected to be put to use by government bodies in Jinan by the end of next month, but could later be rolled out much more widely in finance, energy and other sectors.

The key benefit of quantum networks over traditional communication techniques is that they are able to provide whole new level of security. Quantum communications enable messages to be kept secret through the use of an encryption key, which is coded into the properties of entangled particles. The network is said to be impenetrable because, by its very nature, any interference in quantum communications would automatically corrupt the signal. As a result, unlike other communications networks, if a snooping third party were to tap in to the line, it would immediately become apparent.

The Jinan network marks the latest of several big Chinese research achievements in the field of quantum communications. Recently, Chinese researchers succeeded in sending the first satellite message to Earth via quantum communications.

Work has also begun on similar communications networks in other Chinese big cities, including Wuhan, the capital of Hubei Province.

DeepMind establishes its first international machine learning lab

Posted on by Helen

DeepMind – the UK-based artificial intelligence (AI) division of Google – has announced it will be joining forces with the University of Alberta to create its first international research lab.

The new lab will tap into the talent of leading academics in the field of AI, and will be led jointly by Rich Sutton, Michael Bowling and Patrick Pilarski.

A collaboration with the University of Alberta has been deemed a natural move for DeepMind

DeepMind describes itself as a “hybrid of start-up culture and academia”, a model that will be pushed forward by its newly announced partnership. The company will provide funding and support to AI programmes at the University of Alberta, while also benefitting from the expertise of its academics.

The company has already flourished in the UK by forging partnerships with top academic institutions, including University College London and Oxford University. According to a statement by DeepMind: “Our hope is that this collaboration will help turbo-charge Edmonton’s growth as a technology and research hub, attracting even more world-class AI researchers to the region and helping to keep them there too.”

DeepMind has made a name for itself as an innovator in reinforcement learning – a machine learning technique that utilises trial and error to allow machines to learn in a similar fashion to human beings. In 2015, the company hit headlines for creating the first machine to defeat a professional Go player

As the University of Alberta has long been a leading academic presence in reinforcement learning, a collaboration with the institution has been deemed a natural move for DeepMind.

“There is incredible alignment between DeepMind and the University of Alberta, both famed for their boundary-pushing research,” said Pilarski, who will retain his role as a professor at the University of Alberta alongside his leadership role at the machine learning lab. “Their complementary areas of expertise are now being combined through DeepMind Alberta, and I look forward to making new scientific breakthroughs together.”

 

Google agrees to open up Android to rivals in Russia

Posted on by Helen

On April 17, Russian authorities announced a final out-of-court deal with Google, stipulating that it must make the Android operating system more hospitable to rival apps and search engines.

The agreement brings an end to a two-year legal process first instigated by Russian search engine Yandex, which complained that Google was making it too hard for rivals to compete with the likes of Chrome, YouTube, Maps and Photos on Android devices.

Under the final deal, Google will no longer be allowed to block phone and tablet manufacturers from pre-installing rival apps and search engines on devices that use Android. Google will also have to develop a new tool that allows users to make rival search engines their default browser. These new measures build on a $7.8m fine that was levied against Google in August 2016 as part of the same investigation by the Russian Federal Antimonopoly Service.

Despite Android being an open platform, Google has found ways to restrict device manufacturers from using it freely

Head of the Russian Federal Antimonopoly Service Igor Artemiev said of the new agreement: “Implementation of the settlement’s terms will be an effective means to secure competition between developers of mobile applications. We managed to find a balance between the necessity to develop the Android ecosystem and interests of third-party developers for promoting their mobile applications and services on Android-based devices.”

Despite Android being an open platform, Google has found ways to restrict device manufacturers from using it freely. Specifically, Google has allegedly threatened to cut off new devices from its hugely popular app store, Play Store, if they have rival services pre-installed. Without access to Play Store, a new phone or tablet would struggle to appeal to consumers.

“Technology platforms make it possible for us (as well as other companies) to continue a rapid pace of innovation”, said Yandex CEO Arkady Volozh. “But this is only possible if those platforms are sufficiently open to foster competition by allowing access to third-party developers. We are excited to have reached a solution that restores these necessary elements to ensure a more dynamic and competitive ecosystem.”

Besides search engine providers, the ruling will also be good for device manufacturers, which will now be able to broaden their appeal by offering a wider range of pre-installed features on their products.

While the agreement currently only applies to Russia, it could serve as a framework for regulators elsewhere. For example, since April 2016, the European Commission has been investigating whether or not Google has been “requiring and incentivising” manufacturers of smartphones and tablets to pre-install Google-only apps. In this sense, the settlement could have broad implications for Android devices worldwide.

Saudi Aramco and General Electric announce joint wind turbine venture

Posted on by Helen

The world’s biggest oil company, Saudi Aramco, has partnered with US energy firm General Electric (GE) to develop the first wind turbine of its kind in Saudi Arabia. The new turbine, supplied by GE, will provide power to Saudi Aramco’s bulk plant in Turaif. Its creation signals an important step forward for renewable energy production in the oil-dependent kingdom.

The unique turbine technology will be able to convert the wind’s kinetic energy into 2.75MW of power at its peak, which Saudi Aramco has said is enough to power around 250 Saudi households.

The impressive structure will have a diameter that is 50 percent wider than the 120 metre-wingspan of an Airbus 380, and could reduce the burning of diesel for power generation by 18,600 barrels of oil per year.

The unique turbine technology will be able to convert the wind’s kinetic energy into 2.75MW of power at its peak

Saudi Arabia is the world’s largest exporter of oil and currently produces only one percent of its energy through renewables. This new turbine is therefore an important manifestation of the kingdom’s growing commitment to renewable energy production, yet it is also part reaction to dropping oil prices in the Gulf.

Falling oil prices has put mounting pressure on the kingdom, pushing it to consider diversification measures in order to reduce the country’s reliance on oil exports. Riyadh cut the pay of government workers for the first time last month, while falling revenues also led Saudi Arabia to support OPEC’s first production cap in eight years.

In April, Deputy Crown Prince Mohammed bin Salman announced the kingdom’s new energy restructuring plans, including setting a 9.5GW renewable energy production target for 2023 as part of the government’s Vision 2030 initiative. The steep increase in electricity tariffs at the beginning of 2016 put the country in the right direction with regards to this programme, while the construction of the new turbine in Turaif is tangible proof of the kingdom’s progress towards freedom from oil dependency.

Also in 2016, Aramco made a $2trn IPO announcement. As the world’s largest oil company, the mammoth stock market listing will help to dramatically reduce the kingdom’s oil-generated government revenues and move the country towards profitable renewable energy production.

Mohammad bin Salman bin Abdulaziz Al-Saud, Chairman of the Council of Economic and Development Affairs in Saudi Arabia, said in his Vision 2030 statement: “We are determined to reinforce and diversify the capabilities of our economy, turning our key strengths into enabling tools for a fully diversified future. As such, we will transform Aramco from an oil producing company into a global industrial conglomerate.”

CNN has estimated the float would result in Aramco being four times the size of Apple, and over five times the size of ExxonMobil.

Aramco’s motto is “where energy is opportunity”. In an energy market of drastically changing commodities, Aramco, to its credit, appears to have fully embraced this forward-looking mentality. With such mammoth projections of market dominance after a decade of delays on renewable energy project deadlines, its trillion-dollar valuation, coupled with a strong commitment to renewable energy production, signposts continued success for both Saudi Arabia and sustainable energy solutions across the globe.

Facebook targets emerging markets with new Messenger Lite

Posted on by Helen

Facebook has launched a ‘lite’ version of its Messenger chat app, to cater for the growing number of Facebook users in developing economies. The new stripped-down Messenger Lite requires less data, allowing users with slow connections and older mobile phones to send text, images and links more efficiently.

“Furthering our goal to empower people all over the world to stay connected, today we’re launching a new app called Messenger Lite, a standalone version of Messenger for Android”, the social media platform announced in a blog post. “With Messenger Lite, more people can stay in contact, regardless of network conditions or storage limitations on their Android devices.”

Facebook Messenger boasts over one billion monthly active users, yet has had limited success in the developing world

Messenger Lite will be launched initially in Sri Lanka, Kenya, Malaysia, Tunisia and Venezuela, and will be expanding into other developing countries over the next few months.

Facebook Messenger – the hugely popular app Messenger Lite is modelled on – boasts over one billion monthly active users, yet has had limited success in the developing world. The main version of the app requires a significant amount of both data and storage, often preventing users with slower internet connections from fully accessing the app.

In recent months, Facebook has been ramping up its ambitions in less-developed economies. In early September, the social network planned to launch a pioneering $200m satellite, which was intended to deliver internet access to rural areas of sub-Saharan Africa. While a launch-pad explosion left the satellite grounded, Facebook promised to continue on its mission of “connecting everyone”.

As part of this ongoing drive, Facebook added Fula, Hausa and a number of other global languages to its services, bringing the number of available language options on the site to over 100. Last year, the social media platform also launched Facebook Lite, a slimmed-down version of its main app, which reached 100 million monthly active users by March 2016.

The introduction of the new Messenger Lite reaffirms Facebook’s desire to appeal to new users in developing countries. With the social media market reaching saturation point in the Western world, targeting emerging markets may prove vital for Facebook’s future growth.

France and Germany call for encryption ban

Posted on by Helen

On August 24, Bernard Cazeneuve and Thomas de Maizière, the interior ministers of France and Germany respectively, took to the stage to argue for the abolishment of end-to-end encryption. In a joint press conference held in Paris, the pair urged the European Commission to adopt new legislation that would allow criminal and security investigators to decrypt data.

Following a series of terrorist attacks that have devastated the two countries over the past year, Cazeneuve and de Maizière called for tighter border controls and better information sharing within the EU. In regards to prohibiting encryption, which would end privacy on messaging apps such as Whatsapp and Telegram, Cazeneuve spoke of the need for European democracies to arm themselves against terrorists that use such services to covertly communicate.

Law enforcement agencies argue that full access to smartphones and other devices can be pivotal in an investigation

While it is still unclear what role encrypted messages played in recent attacks across the two states, the ministers argued for legislation that obligates telecom and internet operators to decrypt data and remove unlawful content when requested in a criminal investigation.

The call marks the latest move in what has been dubbed by many as the ‘crypto war’ – an ongoing clash between the business and academic communities and governmental bodies. The former has long championed privacy above all for its customers and the general public, citing a slippery slope that can ensue when we begin to strip back basic rights. Law enforcement agencies, on the other hand, contend that full access to smartphones and other devices can be pivotal in an investigation.

While unlocking smartphones and decrypting messages could potentially help with law enforcement, there is no guarantee that this would certainly be the case. What is guaranteed, however, is that ending one’s right to privacy is a denial of a basic human right. With such a precedent set, it will become easier to deny other rights in the object of security, which – as history has shown time and time again – is extremely dangerous ground for any state.

For more information on the topic of encryption, take a look at The New Economy‘s special report on the history of cryptography.

 

 

Leading banks unite to create digital cash standard

Posted on by Helen

UBS, Deutsche Bank, Santander and BNY Mellon have joined forces to develop a form of digital cash with the hope it will become an industry standard for settling financial trades over blockchain.

The Financial Times has reported the four banks, as well as electronic broker ICAP, have plans to begin pitching the idea to central banks. The ‘utility settlement coin’, as UBS has named it, is designed to be a more efficient way for large financial institutions to trade.

The utility settlement coin is based on a product developed by Clearmatics Technologies and will allow financial institutions to pay for securities without waiting for a traditional money transfer. Instead digital coins would be traded, which could then be cashed out for local currencies by central banks.

The utility settlement coin is designed to be a more efficient way for large financial institutions to trade

While blockchain is most commonly known as the technology powering the digital currency bitcoin, it has the potential for a number of more mainstream financial applications. Blockchain allows for transactions to be verified and recorded without the need for a central ledger, potentially speeding up back office settlement systems. It also has the potential to benefit regulators by providing a greater level of transaction transparency.

Since a list of transactions would be distributed among a network of computers rather than at a central entity, regulators could find monitoring transactions an easier task.

The coin is technology that UBS has had in development for some time: The Wall Street Journal reported in September 2015 the Swiss bank had begun working on the virtual currency. At the time UBS said it was not planning on issuing the digital coins itself, but was instead working with other entities to create an international standard.

The group is currently aiming for a limited launch of the digital currency in 2018.

While there is the potential for significant benefits, there is still some concern surrounding the security of blockchain transactions. A high-profile hack in August of the bitcoin exchange Bitfinex cost its clients over $60m in stolen bitcoin.

Pfizer acquires cancer drug producer

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Pfizer, the US’ largest drug maker, has outbid competitors to purchase cancer drug developer Medivation for $14bn in cash, marking a change in tactics for the pharmaceutical giant.

Pfizer has firmly ended the bidding war for Medivation that has been dragging on for several months. As reported by Reuters, Pfizer’s offer of $81.50 per share is a 55 percent increase over rival Sanofi’s offer of $52.50 in April, a move which prompted Medivation to put itself up for sale.

CEO David Hung started Medivation in 2003. The flagship drug of Medivation is Xtandi, a prostate cancer drug currently worth approximately $2.2bn per year in sales.

Pfizer’s recent purchases suggest its tactic behind acquisitions is no longer lowering its tax bill, but boosting its selection of drugs

The deal marks a change of strategy for Pfizer after it abandoned its merger with Irish drug maker Allergan earlier this year. The deal was announced at the end of 2015 and would have been the biggest ever merger in the pharmaceutical sector. It generated a significant amount of criticism at the time thanks to Pfizer’s plans to move its headquarters to Ireland after the purchase, thus taking advantage of the country’s lower corporate tax rate.

The deal was officially cancelled in April of this year following US President Barack Obama’s call for global action against tax avoidance. The US treasury also unveiled new regulations designed to make ‘tax inversion’ deals far more difficult. Pfizer was left on the hook for a $400m pay out to Allergan for costs associated with abandoning the deal.

Pfizer’s recent purchases suggest its tactic behind acquisitions is no longer lowering its tax bill, but boosting its selection of drugs. The company is scheduled to make a decision at the end of the year as to whether to split its low-growth generic drug business and its more lucrative branded medicine business into separate entities. Pfizer also recently added an eczema gel to its portfolio in May with the purchase of Anacor Pharmaceuticals in a deal worth $5.2bn.

Cancer is one of the biggest markets in the pharmaceutical sector, according to EvaluatePharma. The sector is worth approximately $80bn per year and is growing by 10 percent annually, prompting several acquisitions. Last year AbbVie purchased Pharmacyclics for $21bn, giving it joint ownership of the leukaemia drug Imbruvica with Johnson & Johnson.

ChemChina acquires Syngenta in $42bn deal

Posted on by Helen

On August 22, state-owned China National Chemical Corp, also known as ChemChina, announced that it had acquired the Swiss agribusiness Syngenta in what will be China’s most ambitious foreign takeover bid to date.

“China National Chemical Corporation (ChemChina) and Syngenta today announced that the companies have received clearance on their proposed transaction from the Committee on Foreign Investment in the United States (CFIUS)”, according to a joint statement by the two companies.

The multibillion-dollar deal marks another significant acquisition for China in what has been a record year of foreign spending for the nation. So far in 2016, China has spent $159.2bn in overseas deals, far surpassing last year’s record of $105.7bn.

The takeover also serves as a significant setback for US agricultural giant Monsanto, which failed to acquire Syngenta in 2015.

So far in 2016, China has spent $159.2bn in overseas deals, far surpassing last year’s record of $105.7bn

The timing of the deal comes as China looks to improve food security for its rapidly growing population. “ChemChina has a very ambitious vision of the industry”, said Syngenta’s Chairman, Michel Demaré, when the deal was first announced. “Obviously it is very interested in securing food supply for 1.5 billion people and as a result knows that only technology can get them there.” Links with Syngenta will give ChemChina a significant foothold in the US agricultural market, as well as opening the nation up to global food networks.

ChemChina first proposed the $42bn takeover in February 2016, yet investors initially doubted that US watchdogs would clear the deal, sending Syngenta’s shares plummeting in price. Despite Demaré insisting there were “no security issues to be concerned about”, the deal has long attracted criticism from sceptics who fear foreign involvement in the US’ agriculture industry.

The acquisition has also sparked concerns over an ever-shrinking circle of global agricultural suppliers. Currently, less than a dozen multinational corporations control nearly 70 percent of the global seed industry, and a recent spate of acquisitions and mergers could very well suggest that competition within the market will shrink further still.

British Government rethinks Chinese nuclear power deal

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“Absolute chaos” is how the British Shadow Energy Secretary, Barry Gardener, has described the Conservative government’s handling of what may be the UK’s first nuclear power plant in 20 years. On July 28, the day the Hinkley Point C project was due to receive its final approval, Theresa May’s new cabinet instead revealed the proposal was under review.

Hinkley Point C (HPC) was first envisioned in the mid-2000s as part of Tony Blair’s ‘nuclear renaissance’. Ignoring the protests of his own cabinet, the then-Prime Minister wholeheartedly endorsed a new generation of nuclear power stations in the hopes of providing Britain with long-term low-carbon power.

Marketed by its owner, EDF Energy, as the solution to Britain’s looming energy crisis, the ill-fated Hinkley project has promised so much, yet seems set to deliver very little. Early ambitions for the venture now seem unlikely, while its ever-mounting costs are hard to ignore. The construction bill alone now stands at £18bn ($23.5bn) – triple its original £6bn ($7.8bn) price tag.

A change in leadership
While this abrupt government U-turn may have thrown a spanner in HPC’s proverbial works, it is a wonder as to why EDF Energy ever took on this costly project in the first place: EDF is in dire financial straits. The French utility company is over €37bn ($41.74bn) in debt, and may need to spend a further €100bn ($113bn) on upgrading its fleet of 58 ageing reactors by 2030.

In addition to these financial woes, EDF’s construction ability has also been called into question following problem-plagued nuclear ventures in France and Finland. Olkiluto 3 in western Finland is a decade overdue, while the Flamanville power station in France is more than three times over budget. With Hinkley C shaping up to be equally as ill fated as its European predecessors, EDF’s decision to storm ahead with the project is certainly perplexing.

Northern Europe has largely shunned nuclear power in favour of renewable alternatives

EDF’s mounting difficulties in Europe reflect the continent’s growing distrust of nuclear energy. Northern Europe has largely shunned nuclear power in favour of renewable alternatives. Following this example, the UK had begun to shift its energy focus towards green energies, with renewables now generating more than 20 percent of Britain’s electricity. This then makes the decision to launch a new nuclear project on UK shores all the more baffling.

If approved, the Hinkley C proposals would see Britain resort back to a power source that is viewed by many as cost-inefficient at best and environmentally catastrophic at best.

Among this myriad of concerns and uncertainties, it’s worth remembering just what drove the British Government to ever consider the misguided Hinkley C project: Chinese investment. As part of his historic first visit to the UK in 2015, President Xi Jinping of China pledged to invest £6bn ($7.85bn) in the Hinkley C nuclear power project. In return for this hefty investment, China received the all clear from then Prime Minister David Cameron to build its own nuclear power station in Bradwell, southeast England. This multi-billion pound deal was lauded by the British Chancellor of the Exchequer, George Osborne, as the start of a “golden decade” in relations between the two nations.

Seeking alternatives
While David Cameron and his cabinet might have been thrilled with the prospect of an increased flow of Chinese capital into the British economy, their celebrations were cut short on June 28 this year when the UK voted Leave in the EU referendum.

This momentous vote saw Cameron and Osborne exit 10 Downing Street and a more Sino-sceptic Theresa May assume the helm of the British Government. With this handover of power came a distinct change in attitude towards Chinese involvement in British nuclear technology.

Roy Pumfrey, a spokesperson for the Somerset-based pressure group Stop Hinkley, explained the significance of the Brexit vote on HPC to The New Economy: “Theresa May was not party to the gung-ho attitude towards having China so deeply involved in financial investment decisions.” He added: “If David Cameron was still the prime minister, I don’t think we would be talking about a pause in Hinkley C, I think we’d be talking about EDF taking the final investment decision and everything going ahead.”

In a few short months, the British Government’s enthusiasm over Chinese nuclear investment has transformed into scepticism. Yet without this guaranteed £6bn in Chinese investment, EDF is not prepared to start construction on the project, leaving progress at a standstill.

Aside from concerns over Chinese involvement in the nuclear project, the British Government cannot ignore that Hinkley C also poses a significant financial risk. The power station is set to be the most costly electricity project in Britain’s history, and in order to fund the massive power plant, the government has pledged to spend an eye-watering £94.50 ($123.67) per megawatt hour for Hinkley’s output – more than double the current rate of around £40 ($52.35) per megawatt hour.

If the Romans had used nuclear power, we would still be storing their radioactive waste today

Since the first deal was signed for the project, anticipated taxpayer subsidies have quadrupled to a staggering £60bn ($78.5bn), with this figure only set to increase over the power station’s 35-year lifespan. This certainly seems an extreme financial gamble given the Bank of England’s recent warnings of a probable post-Brexit recession.

Furthermore, the British Government cannot turn a blind eye to the unavoidable safety risks that come hand-in-hand with nuclear energy. There is still no known economically viable method of safely disposing of nuclear waste. What’s more, the long half-lives of radioactive materials mean this issue will continue to afflict future generations. To give the timeframe some perspective, consider this: if the Romans had used nuclear power, we would still be storing their radioactive waste today.

As the problems with nuclear power continue to pile up, renewable energies are becoming ever more attractive. According to Bloomberg New Energy Finance, offshore windfarms are now the cheapest form of UK electricity, with costs of producing wind energy expected to fall by another third by 2025. This makes offshore windfarms already as cost-effective as even the most modern nuclear power stations.

Furthermore, innovations in UK solar energy has seen the industry enjoy a similar level of success, with costs having fallen 10 percent each year since the 1980s. With renewable energy prices at record lows and recent breakthroughs in battery storage, now is the time to look to renewables to fill Britain’s rapidly expanding energy gap. While this imminent crisis must be faced head-on, it is clear the future lies in innovative renewable energy, not in out-dated and ever more costly nuclear power.

Uber announces trial of driverless fleet

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More than a year on from Uber’s announcement that it was working on self-driving vehicles, the company has finally unveiled plans to deploy a small autonomous fleet in Pittsburgh. The launch will take place within the fortnight and forms the basis of a partnership between Uber and Volvo, in which the two companies have invested $300m with a view to bringing ridesharing, self-driving services to consumers.

The first fleet will be made up of Volvo XC90s, and while each vehicle will be manned by an engineer, the cars will essentially be able to navigate the roads autonomously. The designated ‘driver’ will take the wheel as and when they are needed, and will take notes if necessary.

Starting out with 100 vehicles – free of charge to consumers, no less – the scheme will be extended to other areas of the country should it prove successful.

While each vehicle will be manned by an engineer, the cars will essentially be able to navigate the roads autonomously

Speaking to the Financial Times, Uber’s CEO, Travis Kalanick, said: “Uber’s mission – to provide transportation as reliable as running water, everywhere for everyone – is not possible without moving into this kind of technology.”

The announcement coincides with Uber’s acquisition of Otto, a start-up founded by former Google employees that focuses on developing driverless technology for trucks. Anthony Levandowski, the company’s founder, previously founded 510 Systems, which itself was purchased by Google for its own driverless vehicle project.

Kalanick wrote in a statement: “Together, we now have one of the strongest autonomous engineering groups in the world: self-driving trucks and cars that are already on the road thanks to Otto and Uber’s Advanced Technologies Centre in Pittsburgh; the practical experience that comes from running ridesharing and delivery services in hundreds of cities; with the data and intelligence that comes from doing 1.2 billion miles on the road every month.”

Uber to merge with China’s Didi Chuxing

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Taxi app Uber has announced an upcoming merger with its Chinese rival, Didi Chuxing. According to Bloomberg, the $35bn deal will give investors in Uber’s China business, including Chinese internet giant Baidu, a 20 percent stake in the company.

In addition to Uber selling its Chinese subsidiary, Didi Chuxing will invest $1bn into Uber’s main business.

The deal ends an ongoing rivalry between the two companies, who are allegedly constantly competing for customers and drivers across the country, where Didi Chuxing continues to dominate. According to the BBC, Didi Chuxing claims to provide more than 12 million journeys a day and has 87 percent of the market share in China.

The deal ends an ongoing rivalry between the two companies, who are allegedly constantly competing for customers and drivers across the country

Some sources claim that the total value of the combined business is an estimated $35bn, although Didi had no immediate comment and Uber declined to comment.

Chinese news outlets and social media sites were circulating a blog post believed to be written by Uber’s Chief Executive, Travis Kalanick, according to CNBC. According to the post: “Uber and Didi Chuxing are investing billions of dollars in China, and both companies have yet to turn a profit there.

“Getting to profitability is the only way to build a sustainable business that can best serve Chinese riders, drivers and cities over the long term.”

Didi Chuxing – whose name in Chinese literally translates to “honk honk, commute” – has recently closed a financing round worth $7.3bn – including a $1bn investment from Apple.

The purchase of Uber’s China business may complicate Didi’s future partnerships with other global start-up apps joining the developing taxi-tech sector. While the deal is clearly progressive in many ways, Didi is now under a lot of pressure to succeed in a country that is in need of economic reform.