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Alternative: Innovation happens within the context of Chinas censorship and political regime. Blocking of entrenched western competitors allows home grown solu

Alternative: Innovation happens within the context of Chinas censorship and political regime. Blocking of entrenched western competitors allows home grown solutions to spring up, and local technological know how to develop faster. Capitalism and innovation turn out to work within the context of an illiberal society just fine. Especially as China avoids the mistake of closing itself off to the rest of the world, but stays integrated in the markets, as well as the academic exchanges. The Chinese government doesn't stop high tech investment, but only blocks a few select companies that have products that are, at their core, easy to replicate (WhatsApp, Facebook, to a lesser degree Google) at a sufficient level of quality. Rather than free markets pushing towards a more liberal politics, the Chinese government develops means to make the market optimize for political obedience [1]. Most people individually will consider themselves "free enough", and not care about politics as long as the country is well managed. Nothing stops you from starting to research or trying to build self-driving cars in China [2]. China will continue to manage to hire western talent for its firms [3] until whatever skill gap still exists is filled. [1] https://en.wikipedia.org/wiki/Social_Credit_System https://en.wikipedia.org/wiki/Social_Credit_System [2] https://www.cnbc.com/2017/09/01/goldman-says-china-has-talent-data-and-infrastructure-to-embrace-ai.html https://www.cnbc.com/2017/09/01/goldman-says-china-has-talen... [3] https://qz.com/1062035/half-of-the-top-10-employers-of-ai-talent-in-china-are-american/ https://qz.com/1062035/half-of-the-top-10-employers-of-ai-ta...

starchand 9y ago
100% this. And occasionally these apps out innervate their western counterparts. WeChat is better than WhatsApp, Facebook.
- cdelsolar 9y ago
  out innervate? nice astroturfing
- drraid0 9y ago
  How is it better than whatsapp?
  - infinii 9y ago
    Not going to go into detail as I'm sure you know how to use Google. Wechat isn't simply chat. It has grown into a platform that has empowered it's users to partake in a growing ecommerce industry. It also has p2p payments which is hugely popular.
    - Canada 9y ago
      If there were only 1 channel on TV, that channel would be very popular! If Google or Facebook were given a monopoly on chat by the US government, and hardly anyone had credit cards, then their wallets would be universally popular too. WeChat isn't going to get much market penetration outside of China because it's just not very good. At least that's my opinion, as someone who's forced it use it in China.
    - drraid0 9y ago
      WeChat also has a shit privacy and security record. In the western world there are also plenty of payment alternatives to using a chat program.
- elefanten 9y ago
  WeChat became one of the main mobile consumer platforms in China. It seems weird/different than elsewhere, because it's a chat app. It's basically just a different UX for the homescreen. Comparing WeChat to WhatsApp on feature count is big time apples to oranges.
barrkel 9y ago
Illiberal regimes are assumed to be kleptocratic. Historically, it's rare to get a succession of just rulers when the temptation to take is there, and there isn't a strong balance of powers. There have been just rulers for a while, but the risk of regression to the mean is ever present. We'll see how things go.
- int_19h 9y ago
  Conversely, there are plenty of democratic liberal regimes that turn up to be kleptocratic - just look at Brazil as one recent example. It's also not clear whether kleptocracy can't be implemented in a way such that it's not a significant detriment to development. Singapore is arguably a kleptocracy, but it's a surprisingly well-managed one.
  - barrkel 9y ago
    There's long been a hope that integration into the wider economy prevents war - the idea being that countries that trade deeply won't fight each other. The same logic seems to support the idea that trade can also act as a brake on kleptocracy - since stealing would mean harming foreign investment, damaging the goose that lays the golden eggs. But I think it's mostly a matter of time and happiness of the population. When things are good, the apple cart stays upright. If they turn grim, everything gets a lot more unstable and the extremes come out. Depending on where it goes, it can get into a feedback cycle - I think this happened in Venezuela.
    - int_19h 9y ago
      > There's long been a hope that integration into the wider economy prevents war - the idea being that countries that trade deeply won't fight each other. There was a guy by the name of Norman Angell, who wrote a book called "The Great Illusion" about that exact thing. The premise, to quote Wikipedia, was that "the economic cost of war was so great that no one could possibly hope to gain by starting a war the consequences of which would be so disastrous", on the basis of considerable economic interdependence of major powers. The book was published in 1909.
thriftwy 9y ago
But you are also blocking innovators. > optimize for political obedience And put innovation in a grave. Without a gravestone.
a1371 9y ago
I think this alternative is more reasonable. Those who think China is just a copying machine, underestimate the influence the Chinese engineers had in the landscape of many industries. The hoverboards (the type with wheels) became a household product thanks to them. Conceptualization is not making something actually happen, unlike what the patent-trolls want us to believe. IoT was first proposed in the 90s, but did it gain any traction before cheap Chinese prototyping components? This bares the question, is it the West that has made IoT or the East?
- Sargos 9y ago
  Chinese engineers didn't make the hoverboard. If anything the hoverboard example disproves your example as they just copied the hoverboard from foreign companies. I know what you're point seems to be even though you aren't communicating it very well. I do think you're missing the fact that producing goods cheaply does not make you a leader in tech. Besides quick fads like hoverboards or fidget spinners China does not have much traction with actually producing and selling products. Things might be made in China but they are designed by foreign companies and the vast majority of the profit leaves the country.
  - JBiserkov 9y ago
    Have you heard about a certain drone manufacturer, DJI?
    - Sargos 9y ago
      I'm certainly not saying that there aren't actual Chinese products that are selling. It's just not the norm. DJI is a great company but not indicative of the general ecosystem of China.
      - dreamfactored 9y ago
        You are right that today DJI is exceptional and represents the cutting edge - but that in itself is indicative of what is normal in the future.
majormajor 9y ago
> Especially as China avoids the mistake of closing itself off to the rest of the world, but stays integrated in the markets, as well as the academic exchanges. So if the strategy is have-our-cake-and-eat-it-too why does the rest of the world play along? Corporate greed outside the control of governmental entities? Like the parent and unlike the grandparent, I'm not convinced "openness" of the sort that fosters innovation requires liberal societal values. Openness in terms of not being legally restricted from copying and improving on existing products is the bigger one there, and China has this in spades. It's similar to the industrializing United States in the 19th century, which went from copying industrialized England to surpassing it - would less free political speech have stopped that?
- Mikeb85 9y ago
  > So if the strategy is have-our-cake-and-eat-it-too why does the rest of the world play along? Corporate greed outside the control of governmental entities? Because having access to even a fraction of China's market is a huge boon to any company, as is having access to Chinese manufacturing. And playing along with China has made their society far more open and capitalistic, even if the ruling class occasionally attempts to assert their dominance. China will progress at their own pace, but however they do it has to be homegrown. Simply overthrowing the ruling party like most westerners want would create chaos, the transition has to occur from within and at their own pace.
  - majormajor 9y ago
    Which sounds like the "corporate profit maximizing controlled at higher-than-governmental levels" explanation. I think the argument in recent coverage like this is that it's no longer "has made their society far more open" but "HAD made their society far more open." And then it really exposes the financially-opportunistic, rather than principal-guided-as-advertised, nature of how the West deals with different countries like Cuba vs Iran vs China vs etc.
    - Mikeb85 9y ago
      Nothing the West does is principled, and the sooner people realise this the sooner they understand why the rest of the world reacts the way they do to the West. From destabilising Libya and Syria, to taking in refugees, to grandstanding with Russia, nothing is done for any set of moral principles. Libya and Syria were 2 nations that believed in Arab and African pan-nationalism, and tried to assert independence and secularism in the face of Western hegemony and Saudi-sponsored Wahhabism. Sure they were dictators and unsavoury, but they also weren't any worse than the many dictators the West has propped up and sponsored over the years. For years many economists and business leaders decried the high salaries, strong unions and high cost of doing business in Germany, Scandinavia, France and elsewhere, so they imported a bunch of refugees under the guise of humanitarian principles, and as a result they've broken the power of unions, have unlimited cheap labour and are dismantling parts of the welfare state (look at what Macron just passed through in France). And finally in Russia, NATO has them completely encircled, we overthrew several governments on their borders and replaced them with pro-Western ones (see "Colour Revolutions", or hell, just look at Mikheil Saakashvili's career path), and then we decry the fact that they finally took action for self-preservation (they had a perpetual lease of the naval base in Sevastopol which the pro-Western government wanted to end, despite the understanding with Ukraine at the dissolution of the USSR). And of course there's the various covert CIA actions throughout the years which have been declassified, it'll be interesting to see in the next 40 years how current events are portrayed in the future. Also, take a look at various developing countries, and actions by the World Bank and western NGOs. Contrast that with how China has courted those same countries. I've been to countries which were decimated and abandoned by the West, and where the only infrastructure projects even happening are funded by China. I know a few people from those countries which even went to study in Chinese universities, and whose futures are going to be linked with China. No one from that country has any illusion of the West being 'good', as they were a former colony abandoned by the West.
Saad_M 9y ago
Another alternative is that you may get a Galapagos island effect where Chinese firms do innovate, but their innovation is tied to the cultural and regulatory norms and not very applicable outside of China. The same effect was seen with Japanese cell phone companies pre-smartphone era.
- dv_dt 9y ago
  But the effect was the complete opposite with Japanese car companies, which ended up being in massive competition with the US industry. (with ups and downs on both sides)
  - akvadrako 9y ago
    And leading in many other industries too, like robotics and video games.
  - nradov 9y ago
    After the initial round of product launches, most Japanese car companies started designing unique products for the US market. Many of the most popular "Japanese" cars in the US were designed and assembled in the US, and aren't even available for purchase in Japan. There are a few exceptions like the Prius, but overall the "Galapagos Island effect" is a good metaphor. It's a very isolated and unique market.
    - nihonde 9y ago
      The same is true in the other direction: Japanese domestic auto sales heavily favor models that you can’t buy in the US. Toyota has Crown dealerships that boast about selling JDM-only models.
    - dv_dt 9y ago
      It's speculative how much of the Japanese company design/assemble in the US is from trying to serve the market more closely, and how much is from trying to align with current or potential US trade restrictions. I think one might argue that there is a similarity of motivation in the US preserving auto industry capability in-nation with China wanting to develop tech capability in-nation. The motivation is similar, but the implementation is different. I do agree there could be a "Galapogos Island" effect, I just don't know how to predict which industry will experience it vs the opposite. I wonder if someday the US will be the Galapagos in that relation though with the sheer size of China and it's possibility to trade with near neighbours India and Indonesia.
nylonstrung 9y ago
Another factor is that Chinese data privacy is much more lax and platforms like WeChat that span so much of consumers' lives have unparalleled access to data which will prove to be major differentiation in the long term.
gaius 9y ago
China will reach some predetermined level of technology that The Party decides they are comfortable with, then close their borders and just get on with being the Middle Kingdom in splendid isolation. That is my prediction. I don't think they feel the need to project power and remake the world the way the US and previously the UK do/did. Maybe they will disengage from the world and look spacewards.
- FabHK 9y ago
  Not entirely implausible. That's in a sense what they did after they sent out Admiral Zheng He with a fleet of ships and thousands of men in the early 15th centuryas far as East Africa - they concluded "meh, nothing interesting there", and shut down the whole program. https://en.wikipedia.org/wiki/Zheng_He https://en.wikipedia.org/wiki/Zheng_He
  - vorg 9y ago
    The funding for Zheng He's voyages was pulled because Ming China needed the resources to defend against renewed attacks from the north, i.e. Mongolia and Siberia. Because Britain is an easily defended island and the Iberian peninsula has the Pyrenee mountains acting as a defensive wall, England and Spain didn't have this type of problem when they sent out their fleets.
    - lookACamel 9y ago
      What about the Dutch?
- the_common_man 9y ago
  This really is a great point. Not everyone wants to dominate mankind.
  - AmIFirstToThink 9y ago
    We do? What kind of racist thing is that?
- 9y ago
westiseast 9y ago
I'm a China hawk, but this is what has been happening and what will continue happening unless something massively more drastic than blocking a single minority foreign app happens. I think there's a tendency for people to overestimate the importance of foreign apps to Chinese consumers and to underestimate the Chinese market. It's almost laughable that people think blocking WhatsApp will make any difference to Chinese people. eg., the Chinese tech/online market is so huge it can sustain multiple competitors of its own in each sector - ride-hailing, search, shopping, food delivery, maps, chat, mobile payments all have massive players providing their own competition and innovation. Genuine ground-breaking technological innovation is rare. When it happens, it's not like China won't get it (eg. touchscreens) because it blocked Google. In a lot of ways, because Chinese consumers are so quick to adopt new technology, there's sometimes more low-level innovation/adaptation because companies can rely on new apps/tools getting traction quickly.
- FabHK 9y ago
  In FinTech in particular, China is years ahead [1]. WeChat Pay had 100m users in 2014. [1] https://www.economist.com/news/finance-and-economics/21717393-advanced-technology-backward-banks-and-soaring-wealth-make-china-leader https://www.economist.com/news/finance-and-economics/2171739...
  - elefanten 9y ago
    This claim gets made a lot, especially by China's government in it's "four great modern inventions" marketing campaign. [1] I don't get it. None of those are Chinese inventions. They're all technologies China adopted really fast. It's a testament to market size, development speed and certain idiosyncrasies about Chinese demographics, etc. But it has nothing to do with invention or innovation. [1] http://www.chinadaily.com.cn/bizchina/tech/2017-08/08/content_30370096.htm http://www.chinadaily.com.cn/bizchina/tech/2017-08/08/conten...
    - averagewall 9y ago
      What's worth more, inventing something or commercializing it? It sounds a bit like USA vs Israel. Israel invents a lot while the US commercializes on a bigger scale. If the US isn't very good at developing new products because of burdensome regulations, small market size, slowness, demographics, etc. then maybe it's just not very good at technology. Other countries are bad at technology because of poor education, access to finance, skill of workers, culture, etc. They're still bad at technology, whatever the reason.
latj 9y ago
Yes. This one.
joe_the_user 9y ago
An alternative to your alternative is the possibility that China is going to have to keep narrowing the area of permitted activity since the state has used this narrowing ie repression as a way to deal with existing structural problems without ending their root causes (problems ranging from credit imbalances to over-capacity in state-owned enterprises to growing inequality to corruption and beyond). China two years ago or maybe China might permit enough market choice to allow basic innovation. But appetite of the repressive apparatus is not going to be sated and virtually all choices may wind-up being politicized. What happens when a well-connected individual asks you to invest-in/consult-for/etc their enterprise? What impact on your social credit might it have if you refuse? It is fairly well established that secrecy and repression tends to breed corruption - when individuals have untouchable power, of course they'll want to leverage that for gain.
dreamfactored 9y ago
This analysis is spot on and sounds more like from someone who has actually been in China. I'd add that China has no choice but to compete through design and innovation as it is ending it's phase as a low wage economy and has a growing middle class to support (the 'copy machine' idea is complete nonsense recycled by lazy journalists who don't have a clue).
visvavasu 9y ago
Thank you, this is perfect.
lewisl9029 9y ago
Unfortunately, this is probably the much more likely scenario, since Chinese tech products have long since reached the point where they're widely considered good enough (or in some cases, much better) compared to western alternatives for a large majority of Chinese citizens. The possibility that eventually Chinese internet products could by their own merit compete in the global market, outcompeting western alternatives in some cases, is the even more terrifying aspect to me, however. I wrote a lengthy post about it not too long ago, and don't have anything useful to add to it yet, so please excuse the copy-paste: To authoritarian governments all over the world, the censorship and surveillance frameworks built into many Chinese internet services like WeChat are actually extremely valuable features, rather than something they'd want to opt out of. These features have been battle-tested in the largest and most ruthlessly robust surveillance state the world has ever seen, and have time and again proven their effectiveness in influencing public opinion and quelling dissent. If an app like WeChat were to ever gain foothold in a nation with an authoritarian government, all they'd have to do is strike a deal with TenCent, and with the flip of a switch, that government can then enjoy unprecedented control and visibility into the "private" communications of its populace. All the friction involved in the decidedly difficult and costly exercise of building your own large-scale surveillance/censorship infrastructure will suddenly have been removed. The one thing Chinese internet services can offer that no western counterpart can reasonably compete with also makes them by far China's most dangerous export: authoritarianism as a service. To those of us in democratic nations, we must also remember that authoritarianism usually doesn't manifest itself as a cliff, but rather as a gradual, slippery downward slope. Every government in the past has displayed authoritarian tendencies in their history, to varying degrees, and governments in the future will inevitably continue to do so. The natural tendency of government is to slide down the slope of authoritarianism, because government is power, and power corrupts. It takes diligence and continued effort on the part of the governing body and its citizenship to counteract this natural descent. All it would take is another 911 type terrorist attack to sway public opinion enough to the point where enacting some kind of dragnet surveillance system in the name of national security would become politically feasible, in any democratic nation in the world. At that point, the horrible user experience and PR nightmare in having to rebalance the national budget or raise taxes to make room for improving your domestic spying infrastructure could be the only thing standing between us and an irreversible descent into authoritarianism. And if a significant portion of a democratic populace happens to be using WeChat at that point, well, let's just say I don't have a lot of faith that my own government could resist the temptation and take a principled stand against such a frictionless way to expand its own powers. As Chinese offerings mature and become polished and innovative enough to compete with western counterparts in markets outside of China, we could easily start to see users around the world voluntarily start switching to them. That could very well mark the beginning of the end of this golden age of democracy as we know it. I highly recommend taking a look at Nathan Freitas's excellent talk "The Great Firewall Inverts": https://www.youtube.com/watch?v=KEJGqNf2rgk https://www.youtube.com/watch?v=KEJGqNf2rgk. In it, he explores how China's so-called Great Firewall is actually a bit of a misnomer because it's most crucial functionality is its ability to control the flow of information inside its own borders as opposed of keeping information out, how this ability is readily available to be exported to countries around the world in the form of internet services like WeChat, and what we can do about it (which is unfortunately, not a lot, other than to educate others on the very non-obvious non-immediate consequences of using these services, and to be vigilant about the spread of authoritarianism in our own governments).
dis-sys 9y ago
> only blocks a few select companies that have products that are, at their core, easy to replicate with low value for the Chinese economy.
auganov 9y ago
Not an alternative at all. It's what's happening and it's no good. The benefactors are the Chinese me-too tech industry and the government. The ultimate loser is the Chinese consumer. If China banned coca-cola and bragged about its burgeoning soft-drink industry we'd all be laughing at it.
mk89 9y ago
China’s strategy, despite all our western arrogance, is paying off. It’s of course not nice to read such things, but who cares in the end. If you go to China, you’ll use Something else.
nickik 9y ago
The argument that capitlaism works just fine in illiberal context has way more evidence against it then for it. China so far is actually an huge exeption, almost unique. I agree however that China can take a light enough approch and that's why I continue to think China growth will go on.
maggiemamap 9y ago
Completely second this. And on a side note, WeChat is a lot more innovative than WhatsApp!

starchand 9y ago

100% this. And occasionally these apps out innervate their western counterparts. WeChat is better than WhatsApp, Facebook.

cdelsolar 9y ago
out innervate? nice astroturfing
drraid0 9y ago
How is it better than whatsapp?
- infinii 9y ago
  Not going to go into detail as I'm sure you know how to use Google. Wechat isn't simply chat. It has grown into a platform that has empowered it's users to partake in a growing ecommerce industry. It also has p2p payments which is hugely popular.
  - Canada 9y ago
    If there were only 1 channel on TV, that channel would be very popular! If Google or Facebook were given a monopoly on chat by the US government, and hardly anyone had credit cards, then their wallets would be universally popular too. WeChat isn't going to get much market penetration outside of China because it's just not very good. At least that's my opinion, as someone who's forced it use it in China.
  - drraid0 9y ago
    WeChat also has a shit privacy and security record. In the western world there are also plenty of payment alternatives to using a chat program.
elefanten 9y ago
WeChat became one of the main mobile consumer platforms in China. It seems weird/different than elsewhere, because it's a chat app. It's basically just a different UX for the homescreen. Comparing WeChat to WhatsApp on feature count is big time apples to oranges.

barrkel 9y ago

Illiberal regimes are assumed to be kleptocratic. Historically, it's rare to get a succession of just rulers when the temptation to take is there, and there isn't a strong balance of powers. There have been just rulers for a while, but the risk of regression to the mean is ever present. We'll see how things go.

int_19h 9y ago
Conversely, there are plenty of democratic liberal regimes that turn up to be kleptocratic - just look at Brazil as one recent example. It's also not clear whether kleptocracy can't be implemented in a way such that it's not a significant detriment to development. Singapore is arguably a kleptocracy, but it's a surprisingly well-managed one.
- barrkel 9y ago
  There's long been a hope that integration into the wider economy prevents war - the idea being that countries that trade deeply won't fight each other. The same logic seems to support the idea that trade can also act as a brake on kleptocracy - since stealing would mean harming foreign investment, damaging the goose that lays the golden eggs. But I think it's mostly a matter of time and happiness of the population. When things are good, the apple cart stays upright. If they turn grim, everything gets a lot more unstable and the extremes come out. Depending on where it goes, it can get into a feedback cycle - I think this happened in Venezuela.
  - int_19h 9y ago
    > There's long been a hope that integration into the wider economy prevents war - the idea being that countries that trade deeply won't fight each other. There was a guy by the name of Norman Angell, who wrote a book called "The Great Illusion" about that exact thing. The premise, to quote Wikipedia, was that "the economic cost of war was so great that no one could possibly hope to gain by starting a war the consequences of which would be so disastrous", on the basis of considerable economic interdependence of major powers. The book was published in 1909.

thriftwy 9y ago

But you are also blocking innovators. > optimize for political obedience And put innovation in a grave. Without a gravestone.

a1371 9y ago

I think this alternative is more reasonable. Those who think China is just a copying machine, underestimate the influence the Chinese engineers had in the landscape of many industries. The hoverboards (the type with wheels) became a household product thanks to them. Conceptualization is not making something actually happen, unlike what the patent-trolls want us to believe. IoT was first proposed in the 90s, but did it gain any traction before cheap Chinese prototyping components? This bares the question, is it the West that has made IoT or the East?

Sargos 9y ago
Chinese engineers didn't make the hoverboard. If anything the hoverboard example disproves your example as they just copied the hoverboard from foreign companies. I know what you're point seems to be even though you aren't communicating it very well. I do think you're missing the fact that producing goods cheaply does not make you a leader in tech. Besides quick fads like hoverboards or fidget spinners China does not have much traction with actually producing and selling products. Things might be made in China but they are designed by foreign companies and the vast majority of the profit leaves the country.
- JBiserkov 9y ago
  Have you heard about a certain drone manufacturer, DJI?
  - Sargos 9y ago
    I'm certainly not saying that there aren't actual Chinese products that are selling. It's just not the norm. DJI is a great company but not indicative of the general ecosystem of China.
    - dreamfactored 9y ago
      You are right that today DJI is exceptional and represents the cutting edge - but that in itself is indicative of what is normal in the future.

majormajor 9y ago

> Especially as China avoids the mistake of closing itself off to the rest of the world, but stays integrated in the markets, as well as the academic exchanges. So if the strategy is have-our-cake-and-eat-it-too why does the rest of the world play along? Corporate greed outside the control of governmental entities? Like the parent and unlike the grandparent, I'm not convinced "openness" of the sort that fosters innovation requires liberal societal values. Openness in terms of not being legally restricted from copying and improving on existing products is the bigger one there, and China has this in spades. It's similar to the industrializing United States in the 19th century, which went from copying industrialized England to surpassing it - would less free political speech have stopped that?

Mikeb85 9y ago
> So if the strategy is have-our-cake-and-eat-it-too why does the rest of the world play along? Corporate greed outside the control of governmental entities? Because having access to even a fraction of China's market is a huge boon to any company, as is having access to Chinese manufacturing. And playing along with China has made their society far more open and capitalistic, even if the ruling class occasionally attempts to assert their dominance. China will progress at their own pace, but however they do it has to be homegrown. Simply overthrowing the ruling party like most westerners want would create chaos, the transition has to occur from within and at their own pace.
- majormajor 9y ago
  Which sounds like the "corporate profit maximizing controlled at higher-than-governmental levels" explanation. I think the argument in recent coverage like this is that it's no longer "has made their society far more open" but "HAD made their society far more open." And then it really exposes the financially-opportunistic, rather than principal-guided-as-advertised, nature of how the West deals with different countries like Cuba vs Iran vs China vs etc.
  - Mikeb85 9y ago
    Nothing the West does is principled, and the sooner people realise this the sooner they understand why the rest of the world reacts the way they do to the West. From destabilising Libya and Syria, to taking in refugees, to grandstanding with Russia, nothing is done for any set of moral principles. Libya and Syria were 2 nations that believed in Arab and African pan-nationalism, and tried to assert independence and secularism in the face of Western hegemony and Saudi-sponsored Wahhabism. Sure they were dictators and unsavoury, but they also weren't any worse than the many dictators the West has propped up and sponsored over the years. For years many economists and business leaders decried the high salaries, strong unions and high cost of doing business in Germany, Scandinavia, France and elsewhere, so they imported a bunch of refugees under the guise of humanitarian principles, and as a result they've broken the power of unions, have unlimited cheap labour and are dismantling parts of the welfare state (look at what Macron just passed through in France). And finally in Russia, NATO has them completely encircled, we overthrew several governments on their borders and replaced them with pro-Western ones (see "Colour Revolutions", or hell, just look at Mikheil Saakashvili's career path), and then we decry the fact that they finally took action for self-preservation (they had a perpetual lease of the naval base in Sevastopol which the pro-Western government wanted to end, despite the understanding with Ukraine at the dissolution of the USSR). And of course there's the various covert CIA actions throughout the years which have been declassified, it'll be interesting to see in the next 40 years how current events are portrayed in the future. Also, take a look at various developing countries, and actions by the World Bank and western NGOs. Contrast that with how China has courted those same countries. I've been to countries which were decimated and abandoned by the West, and where the only infrastructure projects even happening are funded by China. I know a few people from those countries which even went to study in Chinese universities, and whose futures are going to be linked with China. No one from that country has any illusion of the West being 'good', as they were a former colony abandoned by the West.

Saad_M 9y ago

Another alternative is that you may get a Galapagos island effect where Chinese firms do innovate, but their innovation is tied to the cultural and regulatory norms and not very applicable outside of China. The same effect was seen with Japanese cell phone companies pre-smartphone era.

dv_dt 9y ago
But the effect was the complete opposite with Japanese car companies, which ended up being in massive competition with the US industry. (with ups and downs on both sides)
- akvadrako 9y ago
  And leading in many other industries too, like robotics and video games.
- nradov 9y ago
  After the initial round of product launches, most Japanese car companies started designing unique products for the US market. Many of the most popular "Japanese" cars in the US were designed and assembled in the US, and aren't even available for purchase in Japan. There are a few exceptions like the Prius, but overall the "Galapagos Island effect" is a good metaphor. It's a very isolated and unique market.
  - nihonde 9y ago
    The same is true in the other direction: Japanese domestic auto sales heavily favor models that you can’t buy in the US. Toyota has Crown dealerships that boast about selling JDM-only models.
  - dv_dt 9y ago
    It's speculative how much of the Japanese company design/assemble in the US is from trying to serve the market more closely, and how much is from trying to align with current or potential US trade restrictions. I think one might argue that there is a similarity of motivation in the US preserving auto industry capability in-nation with China wanting to develop tech capability in-nation. The motivation is similar, but the implementation is different. I do agree there could be a "Galapogos Island" effect, I just don't know how to predict which industry will experience it vs the opposite. I wonder if someday the US will be the Galapagos in that relation though with the sheer size of China and it's possibility to trade with near neighbours India and Indonesia.

nylonstrung 9y ago

Another factor is that Chinese data privacy is much more lax and platforms like WeChat that span so much of consumers' lives have unparalleled access to data which will prove to be major differentiation in the long term.

gaius 9y ago

China will reach some predetermined level of technology that The Party decides they are comfortable with, then close their borders and just get on with being the Middle Kingdom in splendid isolation. That is my prediction. I don't think they feel the need to project power and remake the world the way the US and previously the UK do/did. Maybe they will disengage from the world and look spacewards.

FabHK 9y ago
Not entirely implausible. That's in a sense what they did after they sent out Admiral Zheng He with a fleet of ships and thousands of men in the early 15th centuryas far as East Africa - they concluded "meh, nothing interesting there", and shut down the whole program. https://en.wikipedia.org/wiki/Zheng_He https://en.wikipedia.org/wiki/Zheng_He
- vorg 9y ago
  The funding for Zheng He's voyages was pulled because Ming China needed the resources to defend against renewed attacks from the north, i.e. Mongolia and Siberia. Because Britain is an easily defended island and the Iberian peninsula has the Pyrenee mountains acting as a defensive wall, England and Spain didn't have this type of problem when they sent out their fleets.
  - lookACamel 9y ago
    What about the Dutch?
the_common_man 9y ago
This really is a great point. Not everyone wants to dominate mankind.
- AmIFirstToThink 9y ago
  We do? What kind of racist thing is that?
9y ago

westiseast 9y ago

I'm a China hawk, but this is what has been happening and what will continue happening unless something massively more drastic than blocking a single minority foreign app happens. I think there's a tendency for people to overestimate the importance of foreign apps to Chinese consumers and to underestimate the Chinese market. It's almost laughable that people think blocking WhatsApp will make any difference to Chinese people. eg., the Chinese tech/online market is so huge it can sustain multiple competitors of its own in each sector - ride-hailing, search, shopping, food delivery, maps, chat, mobile payments all have massive players providing their own competition and innovation. Genuine ground-breaking technological innovation is rare. When it happens, it's not like China won't get it (eg. touchscreens) because it blocked Google. In a lot of ways, because Chinese consumers are so quick to adopt new technology, there's sometimes more low-level innovation/adaptation because companies can rely on new apps/tools getting traction quickly.

FabHK 9y ago
In FinTech in particular, China is years ahead [1]. WeChat Pay had 100m users in 2014. [1] https://www.economist.com/news/finance-and-economics/21717393-advanced-technology-backward-banks-and-soaring-wealth-make-china-leader https://www.economist.com/news/finance-and-economics/2171739...
- elefanten 9y ago
  This claim gets made a lot, especially by China's government in it's "four great modern inventions" marketing campaign. [1] I don't get it. None of those are Chinese inventions. They're all technologies China adopted really fast. It's a testament to market size, development speed and certain idiosyncrasies about Chinese demographics, etc. But it has nothing to do with invention or innovation. [1] http://www.chinadaily.com.cn/bizchina/tech/2017-08/08/content_30370096.htm http://www.chinadaily.com.cn/bizchina/tech/2017-08/08/conten...
  - averagewall 9y ago
    What's worth more, inventing something or commercializing it? It sounds a bit like USA vs Israel. Israel invents a lot while the US commercializes on a bigger scale. If the US isn't very good at developing new products because of burdensome regulations, small market size, slowness, demographics, etc. then maybe it's just not very good at technology. Other countries are bad at technology because of poor education, access to finance, skill of workers, culture, etc. They're still bad at technology, whatever the reason.

latj 9y ago

Yes. This one.

joe_the_user 9y ago

An alternative to your alternative is the possibility that China is going to have to keep narrowing the area of permitted activity since the state has used this narrowing ie repression as a way to deal with existing structural problems without ending their root causes (problems ranging from credit imbalances to over-capacity in state-owned enterprises to growing inequality to corruption and beyond). China two years ago or maybe China might permit enough market choice to allow basic innovation. But appetite of the repressive apparatus is not going to be sated and virtually all choices may wind-up being politicized. What happens when a well-connected individual asks you to invest-in/consult-for/etc their enterprise? What impact on your social credit might it have if you refuse? It is fairly well established that secrecy and repression tends to breed corruption - when individuals have untouchable power, of course they'll want to leverage that for gain.

dreamfactored 9y ago

This analysis is spot on and sounds more like from someone who has actually been in China. I'd add that China has no choice but to compete through design and innovation as it is ending it's phase as a low wage economy and has a growing middle class to support (the 'copy machine' idea is complete nonsense recycled by lazy journalists who don't have a clue).

visvavasu 9y ago

Thank you, this is perfect.

lewisl9029 9y ago

Unfortunately, this is probably the much more likely scenario, since Chinese tech products have long since reached the point where they're widely considered good enough (or in some cases, much better) compared to western alternatives for a large majority of Chinese citizens. The possibility that eventually Chinese internet products could by their own merit compete in the global market, outcompeting western alternatives in some cases, is the even more terrifying aspect to me, however. I wrote a lengthy post about it not too long ago, and don't have anything useful to add to it yet, so please excuse the copy-paste: To authoritarian governments all over the world, the censorship and surveillance frameworks built into many Chinese internet services like WeChat are actually extremely valuable features, rather than something they'd want to opt out of. These features have been battle-tested in the largest and most ruthlessly robust surveillance state the world has ever seen, and have time and again proven their effectiveness in influencing public opinion and quelling dissent. If an app like WeChat were to ever gain foothold in a nation with an authoritarian government, all they'd have to do is strike a deal with TenCent, and with the flip of a switch, that government can then enjoy unprecedented control and visibility into the "private" communications of its populace. All the friction involved in the decidedly difficult and costly exercise of building your own large-scale surveillance/censorship infrastructure will suddenly have been removed. The one thing Chinese internet services can offer that no western counterpart can reasonably compete with also makes them by far China's most dangerous export: authoritarianism as a service. To those of us in democratic nations, we must also remember that authoritarianism usually doesn't manifest itself as a cliff, but rather as a gradual, slippery downward slope. Every government in the past has displayed authoritarian tendencies in their history, to varying degrees, and governments in the future will inevitably continue to do so. The natural tendency of government is to slide down the slope of authoritarianism, because government is power, and power corrupts. It takes diligence and continued effort on the part of the governing body and its citizenship to counteract this natural descent. All it would take is another 911 type terrorist attack to sway public opinion enough to the point where enacting some kind of dragnet surveillance system in the name of national security would become politically feasible, in any democratic nation in the world. At that point, the horrible user experience and PR nightmare in having to rebalance the national budget or raise taxes to make room for improving your domestic spying infrastructure could be the only thing standing between us and an irreversible descent into authoritarianism. And if a significant portion of a democratic populace happens to be using WeChat at that point, well, let's just say I don't have a lot of faith that my own government could resist the temptation and take a principled stand against such a frictionless way to expand its own powers. As Chinese offerings mature and become polished and innovative enough to compete with western counterparts in markets outside of China, we could easily start to see users around the world voluntarily start switching to them. That could very well mark the beginning of the end of this golden age of democracy as we know it. I highly recommend taking a look at Nathan Freitas's excellent talk "The Great Firewall Inverts": https://www.youtube.com/watch?v=KEJGqNf2rgk https://www.youtube.com/watch?v=KEJGqNf2rgk. In it, he explores how China's so-called Great Firewall is actually a bit of a misnomer because it's most crucial functionality is its ability to control the flow of information inside its own borders as opposed of keeping information out, how this ability is readily available to be exported to countries around the world in the form of internet services like WeChat, and what we can do about it (which is unfortunately, not a lot, other than to educate others on the very non-obvious non-immediate consequences of using these services, and to be vigilant about the spread of authoritarianism in our own governments).

dis-sys 9y ago

> only blocks a few select companies that have products that are, at their core, easy to replicate with low value for the Chinese economy.

auganov 9y ago

Not an alternative at all. It's what's happening and it's no good. The benefactors are the Chinese me-too tech industry and the government. The ultimate loser is the Chinese consumer. If China banned coca-cola and bragged about its burgeoning soft-drink industry we'd all be laughing at it.

mk89 9y ago

China’s strategy, despite all our western arrogance, is paying off. It’s of course not nice to read such things, but who cares in the end. If you go to China, you’ll use Something else.

nickik 9y ago

The argument that capitlaism works just fine in illiberal context has way more evidence against it then for it. China so far is actually an huge exeption, almost unique. I agree however that China can take a light enough approch and that's why I continue to think China growth will go on.

maggiemamap 9y ago

Completely second this. And on a side note, WeChat is a lot more innovative than WhatsApp!