
What The Chinese Tech Industry Is Like - collistaeed
http://www.businessinsider.com/what-the-chinese-tech-industry-is-like-2014-1
======
digitalzombie
I would love to see the down sides. It feels like he's on his honeymoon stage
with the country.

I know of a few downsides but the current article make it seems like a tech
paradise.

* pollutions

* the # of people graduating college doesn't imply that the quality of education in China is the same as USA. I've heard stories and my ex went to China to study abroad and cheating is rampant. It's mostly rote learning.

* the stock and IPO he've mentioned make it seems like China stock market is awesome. I've played around with China stocks when China started to trade. Let me tell you, there were tons of pump and dump and companies lying on their balance sheet. An example was JRJC, CAST, CCME, etc.. It's hard, very hard market.

~~~
caprad
All of the amazing websites and apps created here are just copies of other
apps, localized for China. I don't see this as anything to be too proud off,
creating the apps isn't hard, and china has a huge number of people so you
have that going for you.

Show us were China is innovating, that is where the real story is.

~~~
gbog
Roll back in the 80ies, you will see the same comments about Japan doing no
innovation on cars, electronics, etc.

I work in China tech sector, young Chinese are innovating furiously, but it
will be more obvious when there will be one or two worldwide success. I would
bet it'll come from hardware and probably shanzhai movement.

------
marme
All those numbers are very misleading. China has shit load of college grads
because 90% of the universities are just diploma mills that you put in 4 years
and you get your degree, there is almost no way to fail out. Most of those
graduates cant even find jobs because they know nothing when they graduate.

The chinese stock market is a joke, there is little regulation, insider
trading and pump and dump schemes are rampant.

All those apps have lots of user but many of them are bots. Companies will use
bots to self promote and repost their shit. I have a weibo and have maybe 4 or
5 posts over the last year and have around a 1,000 follower almost all are
bots who just repost everything i have posted. They are used to boost other
people follower count to make them seem more popular and gain more legit
followers, people call them zombies, they will follow random people just to
make themselves seem more legit and not get deleted by the system.

The biggest hurdle in china is regulation. The Didi app got shutdown last year
because they were allowing people to add tips to their request for taxi, i.e.
you would say i need to go to x location i will give you 5 dollars extra if
you are here in 5 minutes. This was declared illegal as taxi prices are set by
the government and tipping the driver is considered an illegal bribe. They had
to remove this feature before they were allowed to continue operation but it
took weeks of them negotiating with the government before they could go back
online. Apps like Momo are filled with hookers soliciting guys and other
illicit activity.

Google play is actually not banned in china. It is just not the default app
store for android phones and many providers have disabled the ability to
install the play store on their phones. But if you have a compatible phone it
works just fine. There may be so money being paid by other apps stores like
baidu to make sure the google play store is hard to use in china.

This article is look at things with rose colored glasses. Things are not that
great for startups in china. In fact if you dont have a large bank roll or
good government connection chances are your chinese startup will be shutdown
by some form of government intervention since the internet is so heavily
regulated almost everything you do on the internet required special permission
from the government

~~~
turingbook
Again, you just told one side of the story.

It is true that quality of large number of universities in China is poor, but
they still provide millions of Chinese teens every year the opportunities to
know more about the world outside their native towns or villages. They learn a
lot from Internet and classmates even nothing valuable taught in classroom.
They will be more confident and be important part in make everything in China
better and better.

And it is also true that China invested more and more in education. The
average quality is not that good, and the efficiency is low, but there still
are big positive impact on China society in general. Before the big leap in
higher education, only very few teenagers can enroll the universities. The
overall education level is much lower.

As for bots and zombies, it is true that the numbers especially of Weibo are a
bit overstated. But the real number is still big, very big. After all China
has the biggest population. The smart phones sold in China has exceeded USA
last year. Most of the users will install some apps like Wechat, QQ, Weibo and
Alipay, etc. So you can calculate the real numbers. The order of magnitude is
the same (in hundreds of millions).

Regulation is a problem, but the government does not rule everything. You can
find your ways to survive and grow. Nearly all Internet giants including Big
Three (we called BAT=Baidu，Tencent, and Alibaba) in China grew from nothing,
without a large bank roll or good government connection at least at the
beginning.

------
WaterSponge
With those huge user bases for these Chinese sites how come we don't get much
feedback on the web about there scaling issues and challenges?

What platforms are these massive sites built on? as they seem to dwarf the US
darlings we regularly discuss on HN.

Where can I find the Chinese dev and admin forums and read via google
translate?

Thx

~~~
lkrubner
A lot of innovation seems to come out of China. I know that, at least in the
world of Clojure, the fastest webserver is http-kit, which Shen Feng spent a
lot of time developing:

[http://shenfeng.me/async-clojure-http-client.html](http://shenfeng.me/async-
clojure-http-client.html)

[http://http-kit.org/600k-concurrent-connection-http-kit.html](http://http-
kit.org/600k-concurrent-connection-http-kit.html)

[https://github.com/ptaoussanis/clojure-web-server-
benchmarks](https://github.com/ptaoussanis/clojure-web-server-benchmarks)

------
cmelbye
Are most of those numbers that surprising considering China's population? To
me, it's not very interesting that a country with a huge population has a huge
amount of graduates, etc.

~~~
jfoster
I think the interesting thing is how little awareness of all of it there is in
the US. It's easily explained (language barrier) but many people probably
think that Twitter is the most active micro-blogging service in the world,
that PayPal is the only really huge payments service, or that Amazon and eBay
are the major players in ecommerce. For any service you can think of in the
US, there's one in China that might be even bigger.

~~~
seanmcdirmid
> but many people probably think that Twitter is the most active micro-
> blogging service in the world

It is. Weibo doesn't do well outside of China, it is not international like
Twitter is.

> that PayPal is the only really huge payments service

From the perspective of a non-China resident, that is definitely true.

> Amazon and eBay are the major players in ecommerce

Ditto. Though Taobao is trying to become a major international player.

> For any service you can think of in the US, there's one in China that might
> be even bigger.

Except the services in the US are mostly international. The services in China
are almost always limited to just China. The fact that UnionPay is the largest
ATM network in the world (by users...almost all in mainland China) doesn't
mean diddly when I visit the Netherlands or India where my ATM card is
USELESS.

China has decided they can lock out international internet services (via the
GFW) and build their own isolated network. Internally, it is huge, but the
isolation cuts both ways.

~~~
turingbook
GFW did do something but can not explain everything. China Internet companies
have their own advantages: local leaders can make agile decisions to local
market need, employees are more motivated, the management structure is
flatter... For example, ecommerce was not regulated much here, but Amazon and
eBay were beat heavily by local competitors.

~~~
seanmcdirmid
This is quite ridiculous. If the GFW didn't block Facebook or Twitter, they
would have market shares in the mainland similar to those that they have in
Hong Kong and Taiwan.

Chinese Internet companies are still quite Confucian in their organization
with meaningless titles and lots of seniority plays; they are hardly flatter
than the typical American internet company. Many of them still rely on
freaking time cards for their tech workers, for crying out loud!

Amazon does well in China; we order things from them all the time (even rice).

~~~
turingbook
>If the GFW didn't block Facebook or Twitter, they would have market shares in
the mainland similar to those that they have in Hong Kong and Taiwan.

They would have some market shares but not very much, just like Amazon.com is
a small player and one of few foreign survivors in China although I also like
its service. In the past, MSN messenger, Yahoo, Google, eBay, MySpace, to name
a few, all failed in competition with local China players. That is not by
chance.

As for management, the biggest problem of foreign companies is that decisions
especially critical ones are always made in USA, which is normally slow and
ignorant. And founders and top guys in China companies(still very young at
their 20s or 30s) like Pony Ma at Tencent and Robin Li at Baidu can directly
attention the specifics of key products or services even at pixel level.

Who will win?

~~~
seanmcdirmid
> They would have some market shares but not very much, just like Amazon.com
> is a small player and one of few foreign survivors in China although I also
> like its service. In the past, MSN messenger, Yahoo, Google, eBay, MySpace,
> to name a few, all failed in competition with local China players.

Then why doesn't the CCP just unblock twitter, facebook, g+, and so on? I have
a hard time to believe its for reasons of porn (easy to find in the GFW) or
subversion (also easy to find in the GFW). And how do you explain Facebook's
success in HK and Taiwan? People outside of China just being afraid of Chinese
services? That could make sense...

> As for management, the biggest problem of foreign companies is that
> decisions especially critical ones are always made in USA, which is normally
> slow and ignorant.

The biggest problem is that we can't play very well at all in the market.
First, foreign companies have to follow all the rules very strictly: local
companies have the ability to be "flexible" until (and if!) the government
cracks down; they also don't have to deal with the Foreign Corrupt Practices
Act (FCPA). The lawyers of most foreign companies also won't go near ambiguous
China privacy and secrecy laws with a 100 ft. pole, meaning anything that
deals with data or communication inside the GFW absolutely requires a local
partner (say TomTom).

I have friends who worked or are working for local companies, and they tell
stories of extreme shadiness. These are not even small no-name companies, but
companies you've probably heard of before; I won't name names since the
foreign community that works in these companies is very small. They work very
hard, but the market is cut throat and they do what they need to do to
survive.

~~~
turingbook
＞Then why doesn't the CCP just unblock twitter, facebook, g+, and so on?

It seems that you believe China government helped local players succeed. That
is not true in general. The private local Internet companies are not the
government's child. They are mostly controlled by foreign investors.

~~~
seanmcdirmid
The CCP likes companies they can control, whether there are foreign investors
or not. This is especially important since the rule of law isn't so developed
in China and often directives go through non-legal channels, which Google
couldn't deal with while Baidu has no problem with it. Both of these companies
are listed on the Nasdaq, but one is controlled by Americans and the other by
Chinese.

~~~
turingbook
If CCP wanted to control the Internet, it should help Renmin, Xinhua,
Wangfujing or China Mobile to be market leaders, not Baidu, Sina, Taobao or
Tencent.

Actually except Baidu vs. Google, you can not think out other examples the
government made big impact. The other competitions in Internet between Yahoo
vs. Sina, eBay/Amazon vs. Taobao/JD, MSN messenger vs. QQ, are all good
counter-examples.

Foreign companies can not adapt to needs from local users. That is the key.
The market is the king to decide the fates of Internet companies and products
in China generally. Others are important but not critical.

~~~
seanmcdirmid
> Foreign companies can not adapt to needs from local users. That is the key.
> The market is the king to decide the fates of Internet companies and
> products in China generally. Others are important but not critical.

And yet, all those companies do very well in HK, Singapore, Taiwan; aren't
they Chinese also? Why is the mainland market so different from other smaller
Chinese markets? They also do well in Indonesia, Thailand, Nepal,
India...while the Chinese companies...they are just going to be stuck being
local.

~~~
turingbook
I do not know a lot about the things outside China. But Japan is another
example that many foreign Internet companies struggle. Maybe we could add
Russia. These markets have something common.

HK and Taiwan are too small market to have strong enough local team.

~~~
seanmcdirmid
Google and Facebook still do very well in Japan. Yahoo does also, obviously.
Russia is no where as near as closed as China is, and many international
companies do well there. China is quite unique.

Supposedly, Chinese internet companies should do well in HK/Taiwan, these
markets are definitely open to them, but since they don't have to compete with
international brands in the mainland, they are not competitive enough to
operate very well on the outside. Besides, any service run inside China is
taboo outside of China (and Americans think the NSA is bad...).

------
pscsbs
Barra used a graph showing that China produces more college degrees to draw
the conclusion that China is "more educated" than the United States.

It'd be helpful to see college degrees conferred per capita before drawing
this conclusion, as a country with 4.3x the population will obviously produce
more degrees.

EDIT: In fact, it looks like China has about 8 million degrees conferred at
last count, and the US about 3 million. Given the population multiplier, China
seems to be far behind the US per capita.

~~~
msvan
The average quality of Chinese higher education is also lower. The top
schools/students are of course good, but the long tail of subpar education is
longer than it is in the US. Source: I've lived in China.

That's not to say it will always be that way, though.

~~~
seanmcdirmid
Even PKU and Qinghua aren't that great; its the quality of the students coming
in that saves them.

------
luxhibernia
Do those slides all add up? Incomes are rising ... except the world probably
can't support a billion chinese at 1st world income levels. There are many
billionaires ... because their gini curve is shot to hell. They have a higher
percentage of graduates ... but most of their degrees are of a low standard.
Looking at the company valuations on top of that and I start to get worried
that this is a giant bubble that's going to take the rest of the world down
with it when it bursts. I hope you can prove me wrong China!

~~~
jfoster
What is it about the world that you think can't support that? It's new
territory, and it may "disrupt" the US (to some extent) over the coming
decades, but China has been bootstrapping itself out of farming for quite a
while already. It's mainly the internet industry that lagged the US by a few
years, but has caught up or surpassed it now.

~~~
joshuapants
The world already can't support the existing first world lifestyles we have in
the long term. We are doing a tiny bit to move toward sustainability, but if
you tack on a few hundred million more people living that way, you run out of
essential resources fast.

------
dengnan
To those who are interested in startups in China:

I personally know some people who worked on start ups in China. From their
experience, I see no hope for start ups without connection with government. I
will show you some facts and some real examples here.

Here are some basic facts:

Chinese government controls Internet content _tightly_. Note that it is not
the same level as NSA's surveillance. NSA's surveillance is bad. But it won't,
or rarely, (directly) change/delete the content. The Chinese government, on
the other hand, can even shut down a whole datacenter without telling the
administrator with no reason --- By "no reason", I mean absolutely no
explanation.

I had a blog and I know the service provider personally (It was a website
hosting blogs like myspace). My blog was a high ranked one on their website. I
posted some content discussing related to democracy/free speech in China and
the whole website was down for a day. My friend received a call from network
management department after they cut the network. They forced my friend to
delete my blog entirely (the whole blog including posts for years.)

Chinese website was required to control any content on their website,
otherwise, like the case I mentioned above, their website might be shutdown
before telling you the reason. This is especially true for small startups.

Here is another example: during the early age of twitter (around 2008.), there
were several startups in China trying to make a copycat of twitter in China.
We call it micro-blogs and there are companies like hainei, jiwai, etc.
working on twitter-like services. As we all know, content on such websites
generated very fast. Much faster than traditional blogs. This makes the
filtering work extremely hard --- those websites has to identify contents
which are "politically incorrect" and delete them before any government
officer found them (And yes, we DO have government employees who are dedicated
to found those contents and report it to their higher authorities.) Such
filtering work is impossible for a startup with tens of employees -- They used
some filtering algorithms but people can always use other words to bypass the
filter. Such micro-blogs (or twitter-like services) grows so fast with too
much "unwanted" content, that finally, by mid-May 2009, they were all shut
down by the government for half a year. Imagine a startup running without a
live service for half a year, you know how hard it would be.

During this time, large companies with government connections like sina,
tencent, 163, ect, prepared their own micro-blog services and finally put it
on line. Such companies has large teams who dedicated themselves to filter
content on their websites. Nowadays, the micro-blogs are only run by those
large companies and none of the startups survived.

I told these stories to those who do not familiar with Chinese Internet Policy
and intent to do some startups in China. My advise is: do not run a content-
based startups, otherwise you can hardly afford the cost of filtering the
users' contents.

EDIT 1: changed some spellings and expressions.

~~~
WaterSponge
So I think the world understands that doing business in china requires some
special attention.

Despite all of that they are doing business in China. Serious dollars are
being made and value being delivered to millions of users. We should want in
on that or to at least have some understanding of how its being done in
comparison to US/EU.

~~~
seanmcdirmid
You assume the Chinese market is free, which it is not. The barriers are high,
and the government just doesn't want you getting in on the business.

~~~
1stop
The last 30 years of Chinese economic growth (fuelled by foreign investment)
disagrees with you.

~~~
seanmcdirmid
The Chinese are totally ok with taking our foreign money (or HK, Taiwan), they
just don't want us to get rich off of it (at least very easily). The economy
is still very protectionist and you have to be very careful when investing
here; many industries are just completely off limits and even those that are
left open are often hobbled by protectionist ownership rules (e.g. 51% must be
owned by a well connected Chinese company).

------
enjo
This just sounds like pure propaganda.

~~~
jfoster
Why? Do you not believe the numbers? Do you not believe that the services
mentioned exist? Do you not believe that the services work well?

~~~
angersock
Well, take--for example--the number of degrees awarded: do those students know
anything of actual value? Are they able to solve problems, or did they just
get a piece of paper?

------
shacharz
Any good startup accelerators in China?

~~~
nnash
Cyberport and Science park in Hong Kong are both quite good.

[http://www.cyberport.hk/en](http://www.cyberport.hk/en)

[http://www.hkstp.org/en-US/Homepage.aspx](http://www.hkstp.org/en-
US/Homepage.aspx)

------
elleferrer
By the way, the interviewer was Loic Le Meur of LeWeb

------
random9dude
Is it just me or HN users are shitting their pants after knowing that China is
bigger than US on some aspects

~~~
philosophus
I think it's that much of his evidence doesn't really prove anything. Example:
"Weibo is like Twitter, except bigger. Barra only ever had 6,000 Twitter
followers. In two months, he has 200,000 Weibo followers." The second sentence
does not prove the first sentence.

~~~
taproot
Weibo has about 60m daily, twitter has around 100m daily users

Source: random & recent google result titles

