I know of a few downsides but the current article make it seems like a tech paradise.
* 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.
Show us were China is innovating, that is where the real story is.
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.
These are all innovative companies (one with Warren Buffet backing them).
China is a dystopic nightmare for the poor and greenzone dreamland for the rich. It's also the future. With generations of population growth, it will be the only country that can manage the crowded future.
Sorry, it's not clear to me what you mean. Do you mean with generations of population growth to come? But then what does that mean?
The truth is that China will gentrify so rapidly over the next 40 years (whole population aging and a generation of strict family planning resulting in too few to replace them), that if China wasn't industrialising and becoming wealthy as fast as it is, it would be destined to the 'has beens' of history due to an inability to care for it's aging.
India is the real future. An extremely young population, with an (arguably) high level of education, which will provide workers for the factories of the world once China is all out of cheap labour both through economic growth and population aging.
Also I don't think he was there to pitch you into doing business in China.
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
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.
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?
There is a lot of scaling issues and challenges, and some discussion about it during tech conferences. I attended a QCON in Beijing last years and half of the talks where about just that. If you have more precise question you can PM me.
Couple of links to mailing lists, presentations, papers, etc on that page.
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.
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).
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?
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.
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.
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.
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.
HK and Taiwan are too small market to have strong enough local team.
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...).
summarizes the situation better than any of the one-dimensional stats from the article.
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.
That's not to say it will always be that way, though.
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.
On the other side, nowadays big companies such as Sina, Tencent, 163(Netease formally) you mentioned and Alibaba, Baidu, among others all grew up from small startups without government connections at the beginning.
And more and more new startups are founded everyday, some of which will be very successful, just as in USA. Qunar and 58.com are the newest ones with market value of more than 3 bilion dollars.
As for content-based business, there are still room for startups. We have seen several new technology news websites emerging these days. Even user-generated content business is possible if you avoid risky political discussion.
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.
If we have limited resources to control speech, I would argue that those resources should be mainly used on to government/politicians. Because they have much more power over the others.
Piracy, drugs, child porn, online gambling, blocking these things online is supposedly by the people through direct or indirect votes. (NOTE: I'm not talking about the facts in the U.S. or any country. I'm talking about how things should work.) The things blocked in China, on the other hand, are only decided by the government, not the people.
> In either case you need enough staff to monitor for such illegal content.
Until there's a clear definition of "illegal". As I mentioned, Chinese government can shutdown any website at their will, without any warranty. No need to say that the government is not voted by the people, which by itself is illegal.
EDIT 1: add another graph to clarify my point.
They also run a hardware focused accelerator in Shenzhen http://haxlr8r.com
Source: random & recent google result titles