Two companies that market themselves as patriotic brands have been mired in scandals.
The first one is Redcore. The Beijing-based startup has been exposed as using Google’s Chrome technology in its “homegrown” web browser.
The company has been developing an original China web browser since its establishment in 2012. It launched the web browser last week, and announced it has raised 250 million yuan (US$36.37 million) in a series C funding round.
Investors include IDG, Morningside Venture Capital, Shenzhen Dachen Innovation Investment and iFlytek. Redcore also claimed that its customers include the State Council, State Grid, BYD and Coca-Cola.
Despite the impressive investors’ list, Redcore proved to be a phoney.
Currently, there are four full-set web browser cores – Blink, Webkit, Trident and Gecko – on which browsers are based. They are developed by Google, Apple, Microsoft and Netscape respectively.
The technology of web browser cores is very complex, involving tens of millions of codes. Obviously, American companies have an absolute monopoly in that space.
In fact, no Chinese company has ever developed its own web browser from scratch. Domestic web browsers like QQ, 360 and Baidu are built around one of the American web browser cores.
This is similar to the case of Chinese smartphones. Although companies like Xiaomi and Huawei are local brands, they rely heavily on American chips.
In releasing its latest version of web browser, Redcore had claimed it’s “breaking the American monopoly”. But netizens soon discovered the installation software for the web browser contained Chrome files.
Redcore drew comparison to the fraudulent chip firm Hanxin in 2006.
A professor at Shanghai Jiao Tong University unveiled a digital signal processing chip he claimed to be an invented-in-China chip. But it was later found to be based on a sanded-down Motorola chip.
Redcore’s founder Chen Benfeng admitted that it had used the Blink core and offered an apology.
But he warned: “If we disappear, China will lose a web browser company.”
Separately, the China Securities Regulatory Commission lambasted local credit rating agency Dagong Global Credit Rating Co. over alleged malpractices, including providing “consulting services to rated companies” for expensive fees and submitting false statements and false information to authorities.
Dagong has been ordered to suspend its domestic credit rating services for a year.
Founded in 1994, Dagong claims that it has broken the “monopoly of Western rating agencies”.
A letter written by Dagong chairman Guan Jianzhong to People’s Bank of China governor Yi Gang has gone viral online. In the letter, Guan argued that punishing the company could destroy an indigenous brand that strives to defend the interests of China.
This article appeared in the Hong Kong Economic Journal on Aug 23
Translation by Julie Zhu
[Chinese version 中文版]
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