
Some of China's greatest advances depend heavily on local conditions - iamthirsty
https://www.bloomberg.com/view/articles/2017-12-03/maybe-china-can-t-take-over-the-world
======
astatine
I think there are two perspectives that might provide a different view - the
world outside the Western countries and when seen from the view of physical
products vs soft services.

I travel a fair bit in sub-Saharan Africa and the extent of Chinese influence
has changed dramatically in the last decade or so. The airports in most
countries are being built/upgraded by Chinese companies. The major highways
are almost always built by the Chinese. Often enough these are financed by
Chinese banks. Even at a consumer level there is a visible presence of Chinese
cars and trucks. Chinese motorcycles are everywhere. Most supermarkets are
filled with Chinese products, and quite often with Chinese brand names. Union
Pay from China is starting to get accepted along with Visa and MasterCard at
retail establishments. Even WeChat is taking root as a communication tool of
choice though WhatsApp is still hugely more popular. There are Chinese
owned/run hotels in most cities to cater to the increasing number of visitors
and it won't be long before they compete with the large chains like Accor and
Marriot for non-Chinese visitors.

To me, there seems a very clear influence at all levels in a very large number
of countries (including Sri Lanka, Maldives and many others in Asia). Even in
India, where I am from, with its rather complex relationship with China,
Chinese products are everywhere. A recent article
([https://www.gadgetsnow.com/tech-news/chinese-fashion-e-
taile...](https://www.gadgetsnow.com/tech-news/chinese-fashion-e-tailers-see-
increased-demand-from-indians/articleshow/61814871.cms)) shows Alibaba
competing quite well with Amazon and Flipkart, the current leaders, in some
categories.

There is also a sense that I see of the Western companies withdrawing a bit,
if only anecdotally. Most flights I take to the African countries less popular
on the tourist circuit has more and more Chinese people looking like they are
on business, and a corresponding reduction from everywhere else.

It may be less in-your-face when compared to the spree of Middle Eastern
purchases in major Western cities from the earlier decards, but this looks
more steady and lasting.

------
owenversteeg
IMHO there's an interesting case to be made here (that China won't take over
the world), but this article seems to have all the thought and research of an
off-the-cuff tweet. The author spends almost half the article talking about
mobile payments, which is a really tiny part of international dominance.

He mentions the gravity model being a limiting factor. Huh? If anything,
including the gravity model would sway the balance further towards China and
away from the US. China is extremely close to a massive number of highly
populated Asian countries, and can run inexpensive trains to Europe. The US
has Canada (population 36 million) or Mexico (127 million) close by, but not
really much else. As a result, China can inexpensively ship to ~5 billion
people, and the US can ship to maybe 500MM. Throw in all of South America
(only 400MM or so people) and the US's reach is still under a billion.

Some figures: Northeast US to southern South America is about 11,000 km
straight line, which has to be done with a complicated series of trucks,
trains, boats, more trucks, etc. Beijing to Eastern Europe is 6400km, and can
be done with two trains.

I think that one of the big blocks for China will be regulations around
product safety and manufacturing/labor standards. There will be also regional
pride ("made in USA"/"made in Europe") products and specialized equipment
(processors, optics, scientific equipment.) There are a lot of cases to be
made, but I don't think this article makes any good ones.

~~~
thewhitetulip
Yes, China can ship to 5 Billion people, but what do you think countries will
do when China starts dumping products on their shores? levy duties or create
awareness in the masses.

I am from India and trust me, even a small shop keepers (I don't mean to be
offensive) refuses to carry Chinese goods because "Why support a country who
screws up at the global stage".

It is a surging wave which might hurt China.

p.s. the 'screw up' is about designating a Pakistani terrorist as a global
terrorist in the UN and China has been vetoing against it.

~~~
volgo
I worked in India and see Chinese products everywhere. You're right that
people will openly dislike them, but most of them don't even know things
they're using are Chinese.

Like Oppo, Xiaomi phones are basically everywhere. Basically everyone uses
PayTM (Alibaba owns 40% of it). Even small vegetable sellers on the side of
the rode will have a QR code for you to pay with PayTM

In the end, practicality trumps blind nationalism every time. The Chinese
dislike Japanese too, but still buy their cars and stuff.

~~~
thewhitetulip
Yes, of course. A majority of the things are manufactured in China, but it
does help the local manufacturing scene if we don't hold in things which China
dumps like Plywood, fire crackers etc because they have no laws in China, no
regulations etc.

of course, there are many such things which are Chinese but the general
populous doesn't know (hello oppo, oneplus and vivo, which are owned by the
same company!). but I am happy with what I saw. Indians should slowly stop
importing substandard Chinese products not because of blind nationalism but
because Chinese products are dumped pan India

------
electic
I think the main issue might be language. For companies, the english block is
a huge benefit. If I launch a company in the UK, I have customers in Canada,
India, United States, Australia, and New Zealand right of the back. I can then
focus on refining the product and get into the mindset of making the product
better for different international audiences.

Secondly, the english block tends to have a similar legal and regulatory
mindset in dealing with companies. The Chinese system seems opaque and hard to
understand for outsiders and for good reason. There is a lot of government
influence and thinking that shapes Chinese products which doesn't appear
elsewhere. That is a huge disadvantage.

When you consider all the of the other issues a young company face, having a
huge multi-national singular language and somewhat similar regulatory
framework is helpful in getting started.

~~~
k__
Language is a big point.

Just look at the EU. We have a much bigger population than the US, but most
speak their own language, which makes grow from lets say Germany to France or
Spain a bigger issue than from the US to Canada.

~~~
NicoJuicy
Yet, here we are, speaking English

~~~
iamthirsty
On a predominately English forum, that is based out of the U.S.

~~~
JBlue42
What would an EU hacker news look like? Would lingua franca would they use?

~~~
iamthirsty
In Europe, probably English. [1]

Anywhere else: Arabic (Mid East/Africa), Chinese (Asia), Spanish (South
America).

[1]: [https://www.economist.com/news/europe/21721861-despite-
jean-...](https://www.economist.com/news/europe/21721861-despite-jean-claude-
junckers-joke-anglophones-should-rest-easy-britain-leaving-eu-its)

~~~
girzel
Not true for Asia. Perhaps some smaller South-East Asian countries have seen
the writing on the wall and started learning Chinese, but for the most part
the defining characteristic of Asian countries is that they each pretend they
are the only Asian country.

~~~
seanmcdirmid
English gets you pretty far outside of china. If there is one language you
need to know as a tourist, English is it.

------
bob_theslob646
>One of the major puzzles of corporate China is why firms have struggled to
expand internationally. The answer may be that they're offering solutions to
problems that don't exist in quite the same way overseas. Unless they can
cater to the needs of customers operating under very different conditions,
their remarkable progress may end at China's shores.

Is this not the case for all companies who want to scale internationally?
Maybe I am naive but I think it would have to be extremely difficult for a U.S
company to immediately succeed in China w/o extensive knowledge/expertise
beforehand.

~~~
k__
Yes.

I don't think this will be a problem for China.

They got enough people on the inside to make their companies really big, more
than the US and they got rather big too before selling to outside customers.

~~~
seanmcdirmid
Even though china borders Myanmar, there are more Burmese working at google in
the USA than Burmese working for all of china’s tech companies. Now what
services are becoming popular in newly opened Myanmar? Hint: none of them are
Chinese.

~~~
gpetukhov
Interesting information regarding Burmese. Do you have a source?

~~~
seanmcdirmid
The Chinese side is really easy, they just don’t take in immigrants. On the
Bay Area side, well, count the number of Burmese restaurants in Palo Alto and
Mountain View. Google doesn’t release its nationality breakdown, but there are
going to be a few Burmese in there mix just going by the Bay Area population.

And that’s why American tech companies have a huge advantage over Chinese tech
companies when it comes to going international. Immigration.

~~~
gpetukhov
I understand but in your comment above you mentioned that there are more
Burmese at Google than at all the Chinese tech companies. I get that that was
just an exaggeration.

~~~
barry-cotter
There are ~166k Burmese in America. There are around 42k Burmese in China.
Given the differences in education between the US and China it would be very
easy for Google to employ more Burmese than the entire Chinese internet
industry.

~~~
seanmcdirmid
It’s not just that, but Burmese in the USA are concentrated in tech corridors
(e.g. the Bay Area) while in china they are mostly refugees in Yunnan.

------
tabdon
It would've been nice if the article covered the successes and failures of the
Chinese corp's international operations. If you look at Alibaba, they have
been very active in acquiring international companies to compliment their
homegrown international offerings. Aliexpress & Alipay are both international
offerings. They bought Lazada to cover Southeast Asia ecommerce. And they are
trying to buy a large US remittance company in MoneyGram. I'm sure there are
many others.

My point is, yes, they enjoy large advantage in mainland that could possibly
make it hard for them overseas. But has it actually? Are they failing or
succeeding?

~~~
gitah
Completely agree with you. The article looks at just a few companies and use
them to claim Chinese brands as a whole won't succeed internationally ever.
Very myopic.

The conclusion would be different if the author analyzed Chinese smartphone
brands instead. Five years ago, even the domestic market was dominated by
foreign brands like HTC and Samsung; now the domestic market is the complete
opposite. Looking at the supply chain, back then all China provided was low-
paid final assembly. Now, Chinese companies are very competitive in supplying
most of the parts: displays, camera modules, fingerprint scanners, enclosures,
sound components, RF components, batteries, SOC, etc. Only high-end
semiconductor components (RAM, NAND, application processors) are lacking but
Chinese industrial policy will rapidly help this area catch up.

Chinese smartphones (phones with a Chinese brand not just manufactured there)
have seen massive success internationally in the past couple of years and now
make up HALF of global marketshare. In India, OnePlus has higher customer
loyalty and sales than Apple in the high-end and Xiaomi is neck in neck with
Samsung as the marketshare leader starting from zero two years ago.

Now remember, all of this happened in just the last five years. What other
industries will break out in the next 5 years?

------
sharpercoder
> Even the bike-sharing craze that's drawn so much attention in the West has
> exploded largely because of China's unique environment. Lower-income Chinese
> have gravitated toward the super-cheap services in order to solve the so-
> called last-mile problem, getting to and from public transport nodes. The
> technology didn't emerge first in the West partly because consumers -- even
> in bike-crazy Holland -- haven't really needed such a cost-effective
> solution.

This is a misconception. Holland has the earliest (2003) and most popular
bike-sharing service offered by the NS (National Railways).

------
erikb
Another bloomberg article. Jees. Replace China with any country or corp you
can think about. This title always applies.

Btw westerners would also use Wechat if they could. But my doctor doesn't have
his computer system integrated with the Wechat appointment API. And I can't
pay Taobao because I can't have an Alipay account as foreigner without a
Chinese mobile number.

If we could we would use it, because the mobile market in China is way more
developed than in the west. Users don't want to have 1000 ways to pay one
product. They want one way to work all the time without hassle.

------
westiseast
This is just plain wrong:

> Alibaba has succeeded in large part because brick-and-mortar retailing is so
> challenging on the mainland. Roughly a quarter of the world's cities with
> more than 500,000 people are located in China -- twice as many as India, the
> next country on the list. Real estate prices in those urban areas are
> astronomical, which limits how big stores can be and thus the range of
> consumer choices.

Shops are _everywhere_ in Chinese cities. Rents are often pretty low, even in
the new fancy malls where they’ll offer good deals for new shops. Consumer
choice in physical stores is often limited by the ‘herd mentality’ of
retailers who crowd hundreds of identical shops together and rarely attempt to
cater to niche markets (eg. I’m a woodworking enthusiast and it’s almost
impossible to find hobbyist tools in a physical store in China).

Alibaba succeeded because of convenience and customer service - before
Alibaba/Taobao, the idea of getting a refund, exchange or return on a faulty
product was unheard of. Shopkeepers would often just shrug when you told them
the product you bought broke the next day. Alibabas policies on returns and
the competitive environment for stores to distinguish themselves changed
everything.

~~~
Slartie
> Consumer choice in physical stores is often limited by the ‘herd mentality’
> of retailers who crowd hundreds of identical shops together and rarely
> attempt to cater to niche markets

Very, very true. It's one of the things about China that I totally don't
understand. I've been in Shanghai and visited some of the "malls" with each of
them having thousands of these tiny shops inside, everyone selling the exact
same stuff as the next one. And I mean "the exact same stuff". The primary
tool to differentiate yourself from the others seems to be the attempts at
screaming louder than the shop next door. I mean, it's good for the inevitable
price negotiation (just walk away, they'll most likely chase you and offer a
much smaller price, and even if they don't, one out of the next 5 stores will
definitely offer the exact same item so you can retry), but it severely limits
the choices, and if there isn't a huge mall that specifically caters to
whatever you currently need you may have a hard time getting whatever you want
to buy.

I can't make economic sense of this behavior from the point of the
shopkeepers. Why be the 50th shop selling the exact same hats as the other 49
shops right next to you? Wouldn't it make sense to sell stuff that you can't
get anywhere else in the vicinity? Is the demand for the weird hats you and
all the other stores sell really at least 50 times higher than for anything
else not being sold in the area?

------
spyckie2
This phenomena is much more obvious with physical assets. If you're a country
that natural ore, oil, farmland, etc, you will prosper. If you're a country
that has few natural resources and is land-locked, you'll suffer.

The idea that you can generate wealth independent of environmental conditions
is flawed - there's no such thing as absolute wealth generation. Demand has a
price point, and fulfilling that demand has a cost point, and its the
environmental conditions that dictate if you'll operate at a profit or loss.

Favorable conditions enable you to operate at profit. These conditions can be
a number of things, like location, access to capital, labor, competition or
lack thereof, etc. Most of the time, these things are not under your control
(unless you're a large corporation that can lobby the government, or you are
backed by the government).

China's government has created conditions for profit by creating favorable
environments. Profit allows for innovation, which is where the technical
advancement comes from.

------
33a
Staying in China right now and heavily use WePay. As a counter point to the
article my experience has been that it totally sucks compared to a credit
card. Credit cards offer consumer protections, convenience and don't require
your cell phone to be charged. Given the choice they're a way better option. I
would not characterize mobile payments as an "advancement".

------
woodandsteel
The article makes some interesting points. I would just add that for
industries where economies of scale are important, China's huge size,
including its internal market, is a big advantage. Also, being the biggest
means more inventors and hence a greater likelihood of inventions that can be
exported.

~~~
yters
What are the Chinese inventing?

~~~
mazerackham
Just a few \- world class manufacturing techniques \- world class drone
technology \- world class civil engineering (high speed rail, bridges) \-
world class super computers

~~~
seanmcdirmid
None of those are inventions, innovations at best, refinements in the average
case.

~~~
mazerackham
cool

------
bllguo
I don't see any positives in underestimating China. By overestimating your
"opponent", you can only come out ahead. These kinds of articles have the
wrong attitude imo.

------
yters
Once China begins innovating like the West, then I think they will be on track
to truly take over. Otherwise, they may successfully copy and steal much
better than anyone else, and perhaps become dominant in that way, but that
does not appear to be the same kind of domination the West has produced.
Historically, it did not overpower outside influence. Instead, China chose to
become isolationist to protect their culture, which ended up stifling their
progress.

