China Senses Silicon Valley Weakness: The Art of Digital War in Action
July 23, 2018
In the early 2000s, China was referred to as the “sleeping dragon,” because it was believed the Middle Kingdom would overtake the US as the world’s top economic power. It did not happen. China still remains a major economic powerhouse, but instead of total economic dominance China is challenging Silicon Valley. The Atlantic looks at how in the article, “How China’s Tech Revolution Threatens Silicon Valley.”
Beijing is a hotbed for young, educated professionals working in startups. Once upon a time college graduates applied for jobs at state-owned businesses and banks, because of job security. It is not like that anymore. People who had those jobs were unengaged with them. The new economic boom fueled by public and private funding allows the young to walk a different path free of the monotonous labor of their fore parents.
There are many Chinese startup success stories: Alibaba, search engine Baidu, and phone manufacturer Xiaomi. Beijing is a startup epicenter and it is very much like walking in New York City, London, Los Angeles, Paris, or another modern city except it is Asian. Since the end of the Cold War, China’s economic and cultural identity has been a group mentality followed by a US copycat status.
China, however, wants to be the world’s technology leader in robots, AI, clean energy cars, and more. The government that used to stymie creativity is now actively calling for it:
“Chinese leaders are looking to young entrepreneurs to spearhead the transformation. It helps that much the world’s hardware, such as smartphones and computers, is already made domestically, with many key parts produced in the southern factory metropolis of Shenzhen. Also supporting China’s strength is an influx of venture capital into Chinese start-ups, from both home and abroad, and from private investments by rich Chinese individuals who lack safer options given China’s volatile stock market and restrictions on investments in housing. Last year, Chinese-led funding accounted for nearly a quarter of worldwide venture capital, a 15-fold increase from 2013, with most of the investment going to Chinese companies, according to a recent Wall Street Journal analysis. During that period, U.S.-led funding doubled.”
The Chinese government is giving money to people with startup ideas. But what does the Chinese government demand in return? China does not like anything that gives them a bad name and they also are controlling. What is the Chinese government going to demand when the interest on their loans comes due?
What will US companies do if certain products and services are no longer affordable, economically viable, or available?
Whitney Grace, July 23, 2018
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