In the technology space these days, it is safe to note that China has held its grounds very well. When you discuss great technology companies, you are simply talking of Chinese and American companies. India has since been muted. Talk of Tencent, Alibaba, Mobike, and Ant Financial (all Chinese) in the community of Apple, Facebook and others. (Pardon the exaggeration of comparing Apple with anything, but you get the point.) I am not sure any Indian firm comes close. Just look at the numbers reported by Tencent this week.
Chinese Internet giant Tencent reported revenue increased 61% in its most recent quarter, the fastest rate of growth in seven years, to almost $10 billion. Net income at the owner of popular messaging app WeChat jumped 69% to $2.7 billion. WeChat reached 980 million monthly active users, meaning by year-end it will likely surpass the 1 billion mark.
In the world of AI, China is giving America a really great challenge. In payment, I can say that China may even be ahead. WeChat leads the global messaging app. Alibaba has brought many new ideas that Amazon has been copying. It was operating supermarkets years before Amazon bought one.
China is not a den of copy-cats, anymore. The nation’s technology has evolved. Yes, while India has the high-octane mathematicians and technical minds, they are largely employees of American companies. They are paid labor as the world does not have any (new) major tech firm from India at the top level, with the global bravado as we see in Chinese tech firms. Yes, India, through its citizens, is playing a major role in what is happening in U.S., but India as a nation is left out.
Yes, India provides the brainpower that drives most elements of Silicon Valley. For all the accusations of copy-cats against China, you will be biased if you do not see that Facebook Messenger is copying WeChat, Amazon is ripping off Alibaba, and Tencent has built a solution that combines Facebook+Twitter+Instagram+[add more] in one ecosystem.
That calls into question: is there something wrong with British education that makes us excellent engineers, and mathematicians, but sub-par entrepreneurs? India shares British education with Nigeria. What is happening in China today is what I would have expected to be emanating from India because they create these excellent tech minds. But it seems, being great innovators goes beyond being brilliant in calculus.
I close this piece with this quote from Fortune Newsletter:
I had dinner this week with Dr. Kai-Fu Lee, who may have the most comprehensive view of the global technology scene of any living person, having earned a Ph.D. at Carnegie Mellon and worked at Apple, Microsoft, and Google , before moving back to China and devoting himself to venture investing there. Lee’s specialty is artificial intelligence, and he is quick to acknowledge that the U.S. has the lead in that technology. But he also is firmly convinced that China will quickly catch up, and surpass.
“The copy-cat era is behind us,” he says.
As I mentioned in a post earlier this week, the Chinese change is especially evident in the realm of mobile payments, where Chinese companies have leap-frogged the credit card business and now have 600 million consumers using sophisticated mobile payments systems.
All those payments spew out massive amounts of data, which feed the development of AI. “Data drives AI,” Lee says. While Google clearly leads the global development of AI technology, he believes Tencent—whose WeChat platform is a leader in online payments—is in second place and rising: “China will become a challenger, if not a leader.”
One huge advantage Chinese companies have is a supportive government, at a time when U.S. giants increasingly face regulatory threats. Attacks against the big tech companies in the U.S. and Europe will be “a big advantage for China,” he believes. In an area like autonomous vehicles, China is “two years behind the U.S. companies,” but every regulatory action against those companies “will help China catch up.”
Separately, I was visited yesterday by Christian Hogg, CEO of Hutchinson China Meditech, which is about to win FDA approval for a lung cancer drug that will be the first synthetic drug ever created in China to make it through the U.S. regulatory process. He expects many more to come. And he, too, credits the Chinese government for the strong support it provides to innovative companies. “China is leap-frogging the way industries have developed in the past,” he says. “China is going to catch up very quickly.”
Asked why government involvement doesn’t stifle innovation in China, as they argue it does in the U.S., both Lee and Hogg have similar answers. The Chinese government is clearly focused on encouraging innovation, and takes a relentless trial-and-error approach to ensuring their success.
Yes, China gets help. But I can tell you that if the entrepreneurs are not ready, the help will not translate into anything of value. I give the Chinese entrepreneurs credit, and we need to emulate them across African cities: China is working.