
From imitation to innovation: How China became a tech superpower - prostoalex
http://www.wired.co.uk/article/how-china-became-tech-superpower-took-over-the-west?utm_source=Benedict%27s+newsletter&utm_campaign=87100fce9d-Benedict%27s+Newsletter&utm_medium=email&utm_term=0_4999ca107f-87100fce9d-70267629
======
tristanj
This article is missing the key part where China blocked and limited products
by major foreign tech giants such as Google, Facebook, Microsoft et al so
homegrown Chinese variants could flourish.

~~~
tinyrick2
Don't you think that by limiting foreign companies' products the local
companies would operate less efficiently since there is no competition? I
think I was taught about this in my econ 101 class. Why does it work
differently this time?

~~~
coldtea
Several factors.

(1) Econ 101 classes mostly sell students an idealized version of economy.

(2) Top-tier countries have used all kinds of techniques (protectionism,
tariffs, etc) to get successful, but now that they don't need those anymore,
they pay lip service to the Econ 101 "laws" that are against those same
techniques.

(3) While clothed in scientific parlance, a lot of what is Econ 101 is just BS
to promote the interests of those in power, not what's best for the people in
general (that's how an ecomomics professor gets grants, becomes policy
advisor, etc).

The scientific part is just using some math while still basing their ideas on
idealized unworkable models and unprovable assumptions.

That said, even if all the above was not true, the internal market in China is
1.6 billion people. 4-5 times the US is more than enough to have lots of
internal competition.

Heck, there are US-only brands the rest of the world doesn't care at all about
-- and that's on a 350 million people market, and they still do just fine.

~~~
ttoinou

       The scientific part is just using some math while still basing their ideas on idealized unworkable models and unprovable assumptions.
    

You don't need maths to show that less competition changes the incentive to
the point that it could bring down quality of service.

~~~
coldtea
Yes, but also don't need maths to know that competition can be controlled with
20 ways (and usually is, e.g. US ISPs), or that you can have tariffs AND
internal competition.

Or even that you can have a fine quality product at a good price even without
competition at all -- e.g. produced by a single vendor, as long as the vendor
is so inclined.

~~~
ttoinou
If competition is controlled then there's less competition and one can expect
efficiency to drop down ceteris paribus. Now you have to explain why
controlling competition could lead into better quality or cheaper prices. (The
only thing I see is that it could let governments keep more money, thus more
power ?)

    
    
      fine quality product at a good price even without competition at all 
    

Threat of competition is also a form of competition (for example a software
product not protected with patents, anyone could compete so the producer
offers good prices)

~~~
Can_Not
The US is really big, if there's not a mis-configured regulation, adding
overseas competition won't really increase efficiency as the perfectly
sperical market in a vacuum equation suggests.

~~~
ttoinou
Maths have nothing to do with economics. I said efficiency as a way of
comparing market offer from the point of view of customers (you can picture
the formula "quality/price" if you want but that doesn't mean that it is
objectively & mathematically defined), meaning that prices go down and/or
quality increases

    
    
       mis-configured regulation
    

Do you have examples of good protectionist regulation ?

And no I gave a specific example with software patents so even if the US is
big enough it can benefits from outside products

~~~
Can_Not
If we're talking about efficiency from the customer point of view, I can pay
full price for American goods on Amazon but receive garbage-cheap Chinese
knock-offs in the mail.

~~~
ttoinou
I don't even understand what you are trying to prove. That some sellers are
not trust worthy ? That there will always be an intermediary taking the profit
?

------
remir
I am not American, but I think it's fair to say that America brought the world
into "modernity". Telephone, computers, software, the internet, smart devices,
these had a huge impact on the world.

To me, the real test of China's innovation will be to see if they can have a
true and significant impact on the world.

We often talk about innovation in terms of technological advancements, but we
need to also talk about innovation as new methods, new way of thinking.

What does the world need today in 2018? The environment is in peril, the
resources are diminishing rapidly, the climate is changing, etc...

Going forward, I believe the most impactful innovations will be the ones who
will deal with these huge problems. I sure hope both the US and China can
unite their efforts here because in the end, we are all sharing this planet.

~~~
dalbasal
In that context, I think you need to consider the US' impact on political
norms. It was the first modern democratic republic. Its basic political norms
and rights form the most important example of what we know as liberal
democracy.

~~~
thefounder
I believe US should be credited with being the biggest supporter of modern
democracy rather than being the first modern democracy. This seems to be
changing though, pure financial interests seem to the new policy. If there is
one reason I don't want China to succeed is because of its communist regime.

~~~
Can_Not
> US should be credited with being the biggest supporter of modern democracy

They have too interesting of a record toppling foreign democracies for me to
agree.

~~~
thefounder
Care to give an example?

------
Animats
It's mostly making real stuff, too. The US suffers from ad-based companies,
especially Google and Facebook, dominating "tech". YC recognizes this; most
newer YC startups are not ad-funded. But it's going to take a while to turn
this around.

It's like that strange period in the 1990s when 40% of US corporate profits
came from financial activities, and every big company had to have a finance
subsidiary with a trading desk. That's so over.

~~~
ddeck
_It 's like that strange period in the 1990s when 40% of US corporate profits
came from financial activities, and every big company had to have a finance
subsidiary with a trading desk. That's so over._

I realize that you're refering finance activities contribution to the profits
of perhaps non-financial firms, but the contribution to GDP from financial
services firms has been growing steadily since the 50s and shows no sign of
slowing [0].

[0] [https://www.wsj.com/amp/articles/BL-
REB-15342?responsive=y](https://www.wsj.com/amp/articles/BL-
REB-15342?responsive=y)

------
hownottowrite
The article is missing the real step one: Education.

From "China’s rise as a major contributor to science and technology"[0]:

"China is now the world’s distant leader in bachelor’s degrees in Science and
Engineering, with 1.1 million in 2010, more than four times the US figure.
This large disparity reflects not only China’s dramatic expansion in higher
education since 1999 but also a much higher percentage of students majoring in
S/E in China, around 44% in 2010, compared with 16% in the United States."

[0]
[http://www.pnas.org/content/111/26/9437](http://www.pnas.org/content/111/26/9437)

~~~
seanmcdirmid
Many of those CS degrees outside of first and second tier universities are not
very good, however. When every foreign language unverisity and teacher’s
college (there called normal universities) has a CS department, there is
definitely something going on.

~~~
hownottowrite
> Many of those CS degrees outside of first and second tier universities are
> not very good, however.

Sure, but even if half the total degrees are substandard that's still twice
the output of the United States. It's a wave that will only pay more dividends
over time.

> When every foreign language unverisity and teacher’s college (there called
> normal universities) has a CS department, there is definitely something
> going on.

The same could be said for every liberal arts college in the United States
which suddenly has a brand new science/math/CS center plopped onto campus.

Anyway, I'd recommend giving the study a read. The authors discuss these
issues as well as a few others. Problems aside, there's a clear trend
developing.

~~~
seanmcdirmid
Even the Chinese government admits quality is a problem, I’ll see if I can
pull up a CD or GT article I read a few years ago. The CS programs in lower
tiered schools are not given many resources, they are often taught programming
by teachers who have never programmed before (similar to being taught English
by the book by an instructor who can’t speak english, my mother in law did
this). It’s not the same as Hoboken liberal arts college teaching CS, it’s
more like Scottsdale cooking academy teaching CS (or at least Zhangjiajie
Tourism College).

When I was working in china, everyone was complaining about finding
programmers that were good enough to hire. You would filter your resume stacks
by 1st then 2nd tier universities (throw everything else out), and still had
to be very rigorous in interviewing. This was way after the CS education boom
happened in the early part of this decade.

------
Mononokay
It's not too hard! The steps on how it did anyone can follow, given they have
the resources!

Step One: Have 1/8 of the world's population in a densely populated region.

Step Two: Don't actively harm people trying to innovate.

Step Three: Wait.

~~~
IntronExon
Real Step Two: Just copy everything.

~~~
bewo001
Every industrial nation started by copying the British. The European countries
and the US did it in the 19th century. In the 1960s/70, everybody joked about
the Japanese copying everything. In the 80s, South Korea was known for cheap
copies of electronic devices. It is/was only a matter of time for China to
move from copying to innovating.

~~~
speedplane
One thing the U.S. (and Europe) still deal very well is branding and
messaging. Most of our electronics are designed and made in China, but they
are still branded and sold by western countries. The U.S. is still adept at
manufacturing brands, lifestyles, identity, and "cool".

While China developing it's own technology was practically inevitable, it will
be far more interesting when they begin influencing what people want.

~~~
seanmcdirmid
Most of our electronics are made in china, many are definitely not designed
there. Anything made for Apple definitely isn’t, most American branded
electronics aren’t either. If it is designed in china, it will be obvious by
the Chinese brand (e.g. Lenovo); the only big foreign company I can think of
that lends its brand to Chinese designs is Nokia.

------
Chiba-City
There is nothing obviously wrong with copying things and nothing obvious right
with "inventing" them first. DOS was not first but beat CPM. Microsoft even
went on to PROMOTE its "fast follower" modus operandi. VC's seeking exits have
very sound reasons for wanting something "first" and preferably "license
protected." But those wins do not obviously confer to either nation states or
even all industries or companies. Making things over and over for expanding
markets is the best source of innovation. Any delusions of "labs" as "heads"
and "making things" as "mere hands" are in fact pure delusions. [Edit: sp]

~~~
petra
It probably depends on industry. It doesn't work so well in today's software,
like Microsoft has proved. Also in industries with strong patents or with
effective process secrets. And i'm not sure that way of thinking is effective
in industries with network effects.

So what's left ? usually industries with low-margins. And afaik, that
generally describes China.

~~~
Chiba-City
First, it would certainly depend on as many sample variations we can find.
Second, you are approaching tautological nonsense where patents and copyrights
are nothing more than excuses for undeserved "outsized returns." Maybe that is
true now or in countries with "first-to-file" patent regimes. There are no
guarantees of ANY future outsized returns, no matter how much people might
desire them. Low-margin might just equal "useful and fair."

------
speedplane
I was recently reviewing front-end frameworks (i.e., React vs. Angular), and
part of the review was looking at Google Trends to get an idea of their
relative popularity. I was pretty surprised to see that while React has been
gaining on Angular for some time worldwide, it's had remarkable growth in
China, where it now surpasses Angular by a wide margin.

Certainly seems that China is faster to adopt this technology than others.
Unclear if this is an isolated incidence, but was just surprised to see China
pick up a new technology faster than most established tech centers.

~~~
dep_b
Reminds me of a story I read a while ago about Russian programmers that didn't
speak English at all so all things we recognized as words in the programming
language didn't have any meaning to them.

Perhaps React has a syntax / mental model that's easier to grasp for non-
English speakers. OO programming is definitely more wordy than functional(ly
oriented) programming.

------
dep_b
The next step in China will be that an important part of their citizens will
earn a living above a certain threshold where they will think about non-
material problems in their lives, which is the moment the Chinese government
has to start dealing with unruly citizens. This happened in the 1960's in
Western Europe and the US.

------
Bucephalus355
There was an article in the WSJ yesterday that called the last 20 years of GE
under CEO under Jeff Immelt “success theater” due to the underlying rot.

China is a country of “business theater”. They sure look like they’re doing
business, lots of factories, tons of people in suits, cargo container ships,
etc. But it’s all just a lie. It’s nothing but the 21st century planned
economy version of the Soviet Union. It’s not even communism as much as simple
totalitarianism. The only thing I haven’t figured out yet is if more than
50,000,000 million people are going to die, which was the same amount in
1958-1963 that died in totalitarian China, a number greater than the USSR and
the Holocaust combined I would like to add.

Capitalism in the US sucks, but it’s very fixable. Capitalism in the 1910’s
was far more horrible, but it was fixed beyond even today with the reforms of
the 30’s-50’s, so I don’t want anyone to think my criticism of China is some
apologia for capitalism right now.

This I do not believe in / don’t want to, but just so everyone is aware, the
theory that really propelled Trump into office was that of the “fourth
turning”, which Steve Bannon was a huge believer in. Essentially it’s the
belief that every 80-90 years a massive war and change in Western government
happens, stretching back to the British defeat of the Armada in 1588. As
Christopher Coker wrote in “The Improbable War”, the next World War is most
likely with China, a county with the manpower and resources to fight a
grinding global battle against the US. We will see.

[https://www.amazon.com/Improbable-War-United-States-
Conflict...](https://www.amazon.com/Improbable-War-United-States-
Conflict/dp/0199396272)

~~~
ghostcluster
Everyone points to automation as the savior, but where is the Chinese
Caterpillar? The Chinese Bosch? As far as I can tell, they still rely
primarily on companies from the US, Japan, and Germany for their automated
heavy industry.

[https://asia.nikkei.com/Business/Companies/Japanese-robot-
ma...](https://asia.nikkei.com/Business/Companies/Japanese-robot-maker-taps-
China-s-demand-for-automation)

~~~
seanmcdirmid
China was able to copy Caterpillar very effectively, to the point where they
are now eating Caterpillar's lunch. It is much harder for them to copy the
precision machinery that German companies wouldn't dare to think of JV-ing in
China.

------
agumonkey
Well students imitate masters before taking their place.

------
yusuke10
It's funny, if an author with a book to peddle repeats the mantra enough
times..."China is innovative", it might become true.

And yet, what evidence does she raise?

"the electronics were assembled in China; almost never were they invented in
China"

"paying with your smartphone has become the norm"

"bikeshare firms"

"China has the largest number of unicorns outside the US"

Nothing that would define as innovations. Let's ask ourselves. What consumer
innovations has China come up with in the last 40 years that is known
worldwide. Think hard. Maybe none? one? Now compare that against Japan in its
40 years rise.

~~~
ghostcluster
Best example I can think of is DJI. Best in class consumer electronics drone
manufacturer and a worldwide brand with high cache.

[https://en.wikipedia.org/wiki/DJI_(company)](https://en.wikipedia.org/wiki/DJI_\(company\))

Founded by a Chinese engineering student with a personal aeronautics hobby,
based in Shenzhen — he's now a billionaire.

~~~
vadimberman
Actually, yes. DJI and Yi-Hang. These ones are truly impressive.

But apart from this, KPIs aside, the Chinese landscape is amazingly scarce
innovation-wise. If one has to tout bikesharing as innovation, it sounds like
there's not much to brag about. I am puzzled at Kai-Fu Lee's claims, he's not
just another VC.

~~~
seanmcdirmid
I’ve heard from someone who actually met with him at Innovation Works that Kai
Fu actually encourages the startups he funds to be derivative. It is much less
risky that way, and VCs in china don’t like much risk, Preferring to
transplant proven businesses from elsewhere.

