Google is joining the scramble for China.
The Silicon Valley-based search giant bought a 1 percent stake in JD.com (JD), China’s No. 2 e-commerce company. JD’s products will soon appear in on Google Shopping results for users in U.S., Europe and non-Chinese parts of Asia.
The move follows a wave of buying in Chinese initial public offerings (IPOs). The most prominent has been Iquiyi (IQ), a streaming-media company viewed as the “Netflix of China,” in turn controlled by “the Google of China”: Baidu (BIDU). Videogame developers Huya (HUYA) and Bilibili (BILI) have also surged.
JD’s up about 5 percent in the pre-market on the news. VShop (VIPS), another Chinese e-commerce stock, rose 4 percent as well.
Remember that behind all the noise about trade wars and tariffs, China’s taken several steps to promote its markets and draw investment. Beijing’s repeatedly cracked down on corruption and speculation, while earlier this month MSCI added mainland-listed A shares to its indexes for the first time. Click here for more.
GOOGL paid the equivalent of $40.58 per share for JD, which ended last week at $43.59. Its larger Chinese rival, Alibaba (BABA), fell about 1 percent in early trading.