
China’s new plan to seize the world’s tech crown from the U.S - pseudolus
https://www.bloomberg.com/news/articles/2020-05-20/china-has-a-new-1-4-trillion-plan-to-overtake-the-u-s-in-tech
======
scarmig
In some ways, the tier one cities in China are more advanced than their
Western counterparts. E.g. mobile payment platforms are ubiquitous, app-
mediated delivery of food is profitable and sustainable, taxi companies and
bikes are more accessible. The last time I was in a cafe, all I had to do was
scan a QR code, select some items on a menu, and press a button to pay and
have it delivered to my table. The tech ecosystem has evolved in a very
different way than the US, but not at all in an obviously worse way: I'd
expect Tencent and Alibaba to outperform the US tech giants over the next ten
years. It's mostly insularity that makes Americans think that China is
massively backwards technologically.

The biggest issue moving into the future is the national government's
hostility toward foreigners, even foreign professionals. Even then, though, a
billion people gives you a lot to work with.

~~~
wahern
Newer != more advanced. ~20 years ago I remember people arguing that Latin
American telecommunications infrastructure was "more advanced" than in the
U.S. simply because per capita cellular usage was greater. If you Google that
claim today, it's still being made regarding Latin America vs Canada. But what
those figures actually represent is that their wired infrastructure is poor
and unreliable in Latin America.

The degree to which an economy is "advanced" has more to do with institutional
systems and processes, not whether they're using the latest tech. Often times
the latest tech papers over institutional deficiencies, but only
superficially. Mobile payment platforms have been ubiquitous in Africa for
many years, but nobody would say that Africa's banking system is "advanced" or
that it's capable of supporting the needs of an advanced financial sector.
They became ubiquitous in Africa first precisely because of institutional
deficiencies. Mobile payments solved some of the most visible consequences,
but by itself it didn't go very far in addressing the underlying problems.
Sure, it's easy to pay a vendor for lunch or a pair of sneakers using your
phone, but what matters infinitely more is how safe and reliable it is to
secure a $2,000,000 LoC to help bring your factory online.

Old systems in older economies persist because they work, or at least work
well enough.

If China overtakes the U.S. in technology dominance, it's because they've
spent 30 years studying, copying, and improving upon American legal,
financial, and business management systems. Notwithstanding the fact that they
are serving the interests and demands of the Communist Party, which often puts
them in a lose-lose scenario, China's economists and policy advisers
understand the systems of modern capitalism better than most of their Western
counterparts.

~~~
paganel
> Mobile payment platforms have been ubiquitous in Africa for many years, but
> nobody would say that Africa's banking system is "advanced"

I'm not a fan of mobile payments myself but I would say that compared to the
US most of Africa's mobile payments are indeed more advanced, yes.

If I understand correctly many poor people in Africa are de facto banked (as
long as they have a mobile phone, which has become pretty achievable right
now), while a very large proportion of the US poor population is de-facto non-
banked, with all the extra financial hardships that that situation entails.

~~~
moreorless
> it's because they've spent 30 years studying, copying, and improving upon
> American legal, financial, and business management systems.

My goodness. American exceptionalism at its very finest. You honestly think
that Eurorpean, Asian, and other countries have nothing to offer? Not
everything great is from American. We need to get over ourselves and realize
that we're not at all that exceptional. Do we do certain things better?
Absolutely. Do we do certain things worse and have a lot to learn from others?
You can bet your last dollar.

~~~
yorwba
It's not American exceptionalism but rather a statement about the tendency of
Chinese policymakers to focus on America when they look for inspiration in
reforming their legal, financial and business systems. For most Chinese,
America is the stereotypical example of how those things work in foreign
countries. In other domains they may look to other countries, e.g. Japan and
Germany when it comes to industry.

------
badrabbit
It comes down to which country people prefer to live in. I suspect a lot of of
foreign money will be leaving China soon, if they can keep peace and prosper
without depending on the west,they stand a solid chance against the US.

Make no mistake,the CCP has no intention of being self-contained, if you are
not with them,you are against them. Their intention is hostile.

The dramatic slow collapse of the US is what enables their success. Americans
and foreigners no longer think it is the land of opportunities.
Fears,divisions,mistrust,avoidable tragedies all over. In China they'll just
suppress anything negative.

They've already positioned themselves well for internal subversion of american
government and society. I just hope things remain peaceful.

~~~
baybal2
> I suspect a lot of of foreign money will be leaving China soon

I do to, a giant portion of China's current account is operational capital of
big multinationals.

When they will start withdrawing money, Yuan will fall through the floor for a
year, or two before rebalancing.

This will give a great boost to China's exporters.

~~~
badrabbit
But can anything replace the west's unending consumer appetite? As big as they
are, can their own people consume enough? I think a lot also depends on US
elections.

~~~
baybal2
That's the question.

Either China tries to grow more itself, or it will seek to boost trade with
whomever is left in the non-aligned camp.

Boosting own consumption didn't work much for China in the past

Selling more to the few of its allies will not work either for the sane
reason.

China's only option is to do a Marshall Plan 2.0 in the developing world, and
hope to dramatically reshape their economies, in hopes of them actually making
these money, and just borrowing to buy Chinese trinkets.

------
magicsmoke
This is going to answer a very important question for the future. Is American
tech dominance the result of some magic cultural mojo born from American
values that can't be replicated in a different cultural sphere, or is it
something that can be replicated if you pump enough money into the right
educational, institutional, and industrial structures while completely
divorced from American culture. Since the fall of the USSR, the global
zeitgeist has been that if you want to be a developed country, adopting
American values in some form is necessary sooner or later. China is
challenging this assumption and many developing countries will be watching the
outcome.

~~~
4cao
America attracts top talent from all around the world. China has a lot of
domestic talent but struggles to put it to good use, and does not really have
a compelling proposition for anybody coming from the outside. This I think is
the biggest differentiator and unlikely to change for the time being.

American tech dominance is also predicated upon having a huge domestic market
that is relatively uniform in terms of the business environment and easy to
navigate. Start here and you have access to 330M potential customers. This is
something that the EU/EEA is only struggling to become: it's mostly still
separate national markets there. China has the same advantage America had as
well, and an even larger population to start with.

America has well-oiled financial markets that are good at allocating capital.
In China it's the government doing the allocation, and the results have often
been abysmal, e.g. technology investment funds being used to further inflate
the property bubble in disguise. However, historically, many of the biggest
technological breakthroughs in the US were associated with government-funded
military projects. No reason why China could not replicate this in principle.

Not sure where the "American values" fit here, it depends what you mean by
that. If you meant entrepreneurial spirit and individualism then the Chinese
are entrepreneurial and individualist too. If you mean liberty/freedom then
these aren't only American values but more broadly the values of the European
Enlightenment, and this is indeed another differentiator between China and the
cultural West. Would be interesting to know what values you had in mind.

~~~
klipt
> America attracts top talent from all around the world.

The current administration seems to be trying hard to change this via travel
bans etc. The one actually good idea that Trump floated in his campaign was
meritocratic points based immigration ala Canada, but it seems that topic got
dropped in favor of more attention drawing stunts like the border wall.

> technology investment funds being used to further inflate the property
> bubble in disguise

Same thing in Silicon Valley, and to a lesser extent many other US cities with
good tech jobs.

~~~
dannyw
I think it’s unsubstantiated to claim that travel bans on select Middle
eastern countries have reduced talented immigration to America.

Employment based immigration has been up year on year for the past 5 years:
[https://travel.state.gov/content/dam/visas/Statistics/Annual...](https://travel.state.gov/content/dam/visas/Statistics/AnnualReports/FY2019AnnualReport/FY19AnnualReport-%20TableII.pdf)

~~~
klipt
Well the worst aspects of the travel ban were reversed by the courts, but the
initial version that Trump tried to pass would have meant that eg Iranians
with green cards who happened to be outside the US when the ban started
couldn't return to the US, which obviously would have reduced (even reversed?)
talented immigration.

Also your link is meaningless because the most common way to get an employment
green card is by adjusting status in the US (from eg H1-B status to green
card), not by getting an immigrant visa, but that table only counts immigrant
visas.

------
keiferski
These discussions never seem to mention cultural soft power. Even if China
were technologically superior to the US, they simply don’t have the cultural
production that the US (and broadly, English-language media) has. American
television and movies are known the world over, whereas I can’t name more than
a handful of (non-Hong Kong) Chinese books/movies with global reach. I also
don’t see Mandarin replacing English as the global default trade language.
China would need to make its own NYC and Hollywood to begin to compete with
this.

Why is this relevant to tech? Because I think one could argue that many tech
companies are built upon this cultural capital; it’s hard to imagine YouTube
being successful globally without being the source of a ton of American-made
video content.

~~~
claudeganon
TikTok would like a word.

~~~
papeda
Serious question: is it a soft power win for China if most non-Chinese users
don't think of it as a Chinese product?

~~~
claudeganon
I would say so. For me (in the US), the amount of TikTok reposts on platforms
like Twitter and Instagram seems to grow by the day and I rarely, if ever, see
the concern about it being a Chinese app raised.

~~~
papeda
Maybe there are two type of soft power. The first type is where a company
makes a globally popular product. The second type is where a company makes a
globally popular product that is recognizably "of its country". TikTok is the
first, McDonalds/Hollywood/NBA is the second?

------
throwaway517365
I'm surprised nobody has mentioned interviews as a possible problem here.

If you buy into the notion that coding interviews generate a lot of false
negatives then there is a lot of talent that's underemployed. If that's the
case, it wouldn't matter at the company level because they can afford false
negatives, but it would matter a lot at the national level if there are a lot
of people that are capable of much more than they are placed at.

And even if it doesn't generate false negatives, the current hiring practices
encourage people to not switch to newer roles:

\- Practicing leetcode takes a long time and you have to brush up on it every
time you look for a new job

\- Coding projects often take a long time, 4-8+ hours

\- Multiple whiteboard interviews with the coding projects

\- Getting ghosted after submitting coding projects leading to burnout

\- Exclusively hiring people that know some very specific libraries or
languages. It might only take a week or two to get up to speed on these. This
encourages devs to devote a ton of their free time into learning new libraries
that they might not even use just to land a job

All of these could also discourage smart people from joining tech, since the
high salaries aren't as high as they look when you factor in all of the extra
time involved here, and some people don't want to sacrifice their leisure time
for higher pay. From what I understand, the tech scene in Europe is bad
exactly because they're way underpaid, so Europe has trouble attracting talent
and getting people to enter into tech.

China might have the same problems here, I'm not sure, but if these
assumptions are true then just finding better ways to match people to jobs
they'd perform the best at would give whatever nation a competitive edge.

~~~
dirtyid
Pentagon jargon filled interview discussing the future of optimizing the
allocation human resources. I mean interviews. It hits on many of your points.

[https://warontherocks.com/2020/05/scoping-the-future-of-
educ...](https://warontherocks.com/2020/05/scoping-the-future-of-education-in-
national-security-in-beyond/)

~~~
LargoLasskhyfv
I can haz transcript? Channel capacity insufficient.

------
lazylizard
What is it that china still cant do?

1\. Metallurgy? Or just engines? Of all types.. Petrol diesel jet gas turbine
steam turbine rocket etc

2\. X86 or general computing cisc chips, maybe fpga n asics too. Maybe fab
process tech as well. Or is it all silicon? Theres only licensed designs and
last gen fab?

3\. glass? Canon L, nikkor ed, any leica or zeiss..

4\. watches? Selitta miyota ronda.. We're not even talking a lange&sohne

5\. Maybe some materials that dow dupont basf bayer akzo nobel are producing?
Roche novartis sanofi?

6\. ???

~~~
janekm
1\. Apparently China can now make the balls for ballpoint pens (a
metallurgical milestone, supposedly?): [https://www.businessinsider.com/china-
has-finally-figured-ou...](https://www.businessinsider.com/china-has-finally-
figured-out-how-to-make-ballpoint-pens-2017-1?r=US&IR=T)

2\. Fab process tech is pretty firmly in Dutch/Swiss/Japanese hands I think?
In terms of fabs, SMIC is planning to start 7nm process this year, so about 3
years behind: [https://www.tomshardware.com/uk/news/chinese-fab-smic-to-
sta...](https://www.tomshardware.com/uk/news/chinese-fab-smic-to-start-7nm-
production-in-the-fourth-quarter-report)

3\. Anecdotally I visited an optics tradeshow in Shenzhen and it was pretty
impressive what was available in advanced lenses for process control. But I'm
no expert. Consumer camera lenses from China have been getting better and
better.

4\. It's not really hard to make mechanical watches if you have great CNC
machines. Which are still dominated by Switzerland (Tornos), Germany (Kern),
Japan (many, including Tsugami). Seagull have been making decent mechanical
watches for >60 years...

5\. China is pushing heavily on gene therapy which may turn out to be a big
part of future medicine

------
baybal2
> _This is going to answer a very important question for the future. Is
> American tech dominance the result of some magic cultural mojo born from
> American values that can 't be replicated in a different cultural sphere, or
> is it something that can be replicated if you pump enough money into the
> right educational, institutional, and industrial structures while completely
> divorced from American culture._

My American comrades, I find you sounding rather alarmist.

While American culture has little to do with it, China doesn't benefit a
single bit from that.

What matters is:

1\. Rich, and talented people can afford to vote with their feet. China is not
a nice place to live if you are one (and to be fair, not safe either.)

2\. Deng Xiaoping has catastrophically undermined China on demography. The
impact of 1 child police will be felt for many decades to come even if China
will abolish demographic controls completely.

3\. All rich, famous, and talented people I know in China are set to move out
_" someday,"_ taking their capital, and brainshare with them. The USA is still
the No. 1 destination for many Chinese.

~~~
Fluid_Mechanics
Another naive anecdotal dismissal of probable geopolitical trends. There’s no
escaping the fact that highly intelligent people willing to work harder than
most people in this culture supported by a sufficiently developed industrial
base will be formidable. Given the cultural unity and the sheer size of
population I would be shocked if we didn’t become a second rate power relative
to them by 2050.

~~~
baybal2
> _There’s no escaping the fact that highly intelligent people willing to work
> harder than most people in this culture supported by a sufficiently
> developed industrial base will be formidable._

Will they be? China's "talent fade" is very much real, and thanks to the event
of past few years is at all time high. Higher than at the previous peak around
2010-2012.

The fact that 2010-2012 "chicken run" worked so well for the generation of
Chinese elites to exit before the change of power, and before Xi Jinping's
mass crackdown only vindicates people trying to leave China now.

People who made money under Xi are afraid of:

1\. Xi losing power, and a repeat of what has happened 10 years ago.

2\. Xi keeping power, and coming back in force, and a repeat of what has
happened 10 years ago.

> _Given the cultural unity and the sheer size of population I would be
> shocked if we didn’t become a second rate power relative to them by 2050._

How much time doesn't matter if the general trend still keeps. It doesn't
matter how much engineers, scientists, and billionaires China will produce if
they will leave China for US, and help Western businesses complete against
their home country.

Look, go to LinkedIn and find how many people with title "engineer" have
Chinese sounding surnames working American multinationals. In some cases, it's
up to 4 out of 5.

Moreover, I say that this process is self-reinforcing with a feedback loop:
the higher the concentration of low wage workers is in China, the more
attractive the labour market becomes for American multinationals hiring
Chinese high end talent. The more money they do, the higher does the trade
imbalance get, and more debt the US can issue.

------
bitxbit
China can’t reach full potential with CCP in place.

~~~
kilroy123
I've always felt the same way. If China were to adopt Democracy, the US would
rapidly fall behind them.

------
Arbalest
"...echoing objectives set forth previously in the Made in China 2025 program"

In other words, this isn't a suprise, just that this is the latest push to
fulfil the existing plan.

------
ideals
[https://outline.com/pXuSZG](https://outline.com/pXuSZG)

------
SomeoneFromCA
This is not serious. US has lots and lots of aces in its sleeve: first - top
quality universities, second - military research, thirdly - with moving TSMC
factories in into US and probably asking/forcing Taiwan to not accept Chinese
orders etc, US will keep its dominance for long.

------
redis_mlc
PG wrote an essay on this in 2006:
[http://paulgraham.com/siliconvalley.html](http://paulgraham.com/siliconvalley.html)

I think the summary is that SV is a unique confluence of education, freedom,
commerce, funding, population, laissez-fair business, military and worker
rights.

The closest I've seen to this is Toronto, though startup investment is on a
miniscule scale compared to SV. Toronto may have an advantage in the future
because health care is free there. (Israel also, and the town where Skype came
from in Estonia?)

For those outside SV, you can talk investors into funding years of development
and marketing based on just an idea. At first it seems crazy, but if the
market is there, it works.

~~~
oillio
Yeah, SV had a lot of factors that needed to be just right for it to be
successful.

But we only need one SV. Once the model is proved out, it will naturally
spread the seeds of startup culture to other cities. Like VC's drifting in the
wind.

The socio-economic soil of the transplants doesn't need to be nearly as
fertile as the first location. It is taking a while, but the model is
definitely spreading. Most every major city has a startup scene these days,
and a government looking to nurture it.

~~~
redis_mlc
We're not seeing that for various reasons, often insurmountable ones.

The Boston area has draconian employee IP ownership agreements, so that gives
California a huge advantage.

Some European countries require pre-payment of pensions, preventing start-ups
from even forming.

PG's essay was published 14 years ago, yet no city council seems to have
adopted it as a checklist.

------
panaffa
I think it's totally going to happen because China has the talent and scale to
pull it off.I do think it'll be inferior to the open global tech ecosystem
that benefits from open idea sharing

------
intopieces
China takes the precise opposite path to the US. While the US pumps trillions
into private hands to keep private enterprise afloat, China spends an equal
amount on infrastructure, largely financed through debt. This is a smart move
because your countries economy could collapse but the nation's financiers
aren't able to repossess poured concrete, AI knowledge or wireless access
points.

~~~
OnlineCourage
Concrete has poor liquidity though both literally and figuratively so when it
turns out you spent way too much money on concrete instead of agricultural
development you are screwed. Also, US financiers are bondholders, meaning the
public. The public reposessing corporations would mean nationalization,
which...Chinas economy is already far more nationalized than the US.

~~~
blackrock
Apparently you’re not following the news lately.

The Fed is buying up all the corporate junk bonds.

And with all the impending bankruptcies, they’re probably a few steps away
from buying company stock outright. You can sugar coat this all you want, but
it is effectively nationalization.

------
mark_l_watson
Good article, a good call to arms.

In my fields of interest (General AI, NLP, machine learning), Chinese research
papers even just 20 years ago did not impress me much. Now, it worries me that
some of the best published research from China gets translated too slowly.

As a US citizen, I think that our ability vs. China’s ability to market high
tech to places like Europe and the upcoming countries in Africa and elsewhere
will be all important.

I don’t think that President Trump’s approach is correct, BTW. We should
invest more in education, research and infrastructure. He is right to push
back, but much more moderately than he is doing. If our economic and tech
“war” with China badly inconveniences other countries, then there will be
blowback.

~~~
yorwba
> some of the best published research from China gets translated too slowly.

Could you give some examples of research where you had to wait a while for a
translation to appear? I was under the impression that Chinese researchers
still try to get their research published in international venues if they can,
which means writing in English. Do they publish in Chinese somewhere else
first? (Where?)

------
neonate
[https://archive.md/eEzUa](https://archive.md/eEzUa)

------
blackrock
A crisis is the best time to spend a ton of money.

Fascinating. If they succeed, then China will advance into a high tech economy
full of computer programmers and electrical engineers, and AI Computer
Scientists.

They want to build out the future digital city, so their citizen can live and
interact in it.

~~~
anthony_doan
> They want to build out the future digital city, so their citizen can live
> and interact in it.

When they started Golden Shield Project they built it for monitor and
surveillance iirc.

Forgive me if I'm skeptical of your view.

I do welcome more competitions between companies/countries which will
hopefully lead to consumers enjoying the benefits.

~~~
blackrock
Well, if you want to take that angle, then are you aware that you’re already
being actively monitored by the Patriot Act, and the NSA, and a host of other
unknown government programs out there? Are you complaining about these, or out
there protesting against them?

------
person_of_color
How does one go long on China if they believe this?

------
Proven
China government has a much bigger problem: where their manufacturers can sell
that stuff.

It's highly unlikely that developed countries will continue to welcome
subsidized products, some (I'm being generous) of them based on stolen
intellectual property.

------
cvaidya1986
Nah

------
robert2020
Finally, a Great Leap Forward!

~~~
godzillabrennus
I wonder how much democide this will result in.

