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What The Chinese Tech Industry Is Like (businessinsider.com)
46 points by collistaeed 1375 days ago | hide | past | web | 60 comments | favorite



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.


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.


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.


They have a lot of existing and potential users. Roughly three times more than the US. And the thing is that there will come a point where they'll go from copying to actually innovating, just like Japan and South Korea did.


- WeChat (On all smartphones and old java shitty ones too)... Tencent in general.

- BYD

- taobao

These are all innovative companies (one with Warren Buffet backing them).


http://www.vice.com/vice-special/ant-and-rat-tribes-in-beiji...

http://unitedphotoindustries.com/exhibitions/rat-tribe/

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.


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.


China has Africa.


again, what does that mean? China has africa as a source of resources? of people? Because so does the rest of the world, and the fact remains that africa's infrastructure is so poor, the continent so corrupt, the level of education so low (on a comparative basis) that it is going to take at least a generation, even with huge investment, to reach any point where Africa is a major contributor to GWP


absolutely never buy chinese stocks, especially on the chinese stock markets. They all, every last one of them lie on their balance sheets. There is no morality in chinese business world, people will cheat their own family members to make some quick money, literally cheat their brothers, cousins etc. Insider trading is rampant, especially pump and dump schemes. There is virtually no regulation for insider trading and the few regulators that exist are easily paid off to turn a blind eye to what is going on. Unless you personally know an executive in the company you should not invest in any chinese company


I don't think it was meant as a review of China. It's a comparison of the tech industries.


Education quality and pollution (lots of high-tech hardware industry stuff) are very relevant to the tech industry, I'd say. Also government and regulation issues.


He is an executive at a Chinese tech company. They have PR awareness so he isn't going to get into anything politically controversial.

Also I don't think he was there to pitch you into doing business in China.


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


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.


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


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://http-kit.org/600k-concurrent-connection-http-kit.html

https://github.com/ptaoussanis/clojure-web-server-benchmarks


I believe Java, PHP and C++ are the most common platforms for sites built between 10 and 5 years ago, with the exception of Douban.com (where I work) which is Python.

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.


Check out Tengine, it's a fork of nginx made by the Taobao engineers. They also contribute back to nginx.

Couple of links to mailing lists, presentations, papers, etc on that page.

http://tengine.taobao.org/


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.


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.


> 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.


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.


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).


>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?


> 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.


>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.


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.


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.


> 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.


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.


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...).


yes, china's growth is in large part a brute-force effect. because it encapsulates growth, the size of the economy, and our existing knowledge (i.e. korea and japan are waaay smaller than china), this (d3) graph

http://www.nytimes.com/interactive/2013/04/08/business/globa...

summarizes the situation better than any of the one-dimensional stats from the article.


The same goes for a lot of stats about America. But who notices Israel's massive per capita tech industry?


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.


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.


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


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!


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.


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.


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.


The stories you told are true but just tell one side of things.

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.


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.


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.


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


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).


MegaUpload, Silk Road shut down by US government. Piracy, drugs, child porn, online gambling. These are things Americans feel are OK to silence. Inciting violence (they have deadly anti-government riots), destabilizing the government. These are things Chinese feel are OK to silence. Different stokes for different folks. In either case you need enough staff to monitor for such illegal content.


Well. According to Ugly duckling theorem[0], any classification algorithm is biased. It's not about finding an unbiased system, it's about which side should be preferred by the system. Specific to the discussion about network surveillance, it's about which group of people should be protected: The mass majority or the minor elite/politicians.

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.

0. http://en.wikipedia.org/wiki/Ugly_duckling_theorem

EDIT 1: add another graph to clarify my point.


This just sounds like pure propaganda.


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?


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?


Any good startup accelerators in China?


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

http://www.cyberport.hk/en

http://www.hkstp.org/en-US/Homepage.aspx


Chinaccelerator is the one I know http://www.chinaccelerator.com

They also run a hardware focused accelerator in Shenzhen http://haxlr8r.com


There is Kai Fu's Innovation Works in Beijing. The startups in that one are mostly focused re-purposing western ideas to China, as that presents less risk and greater opportunities for profits.


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


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


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.


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

Source: random & recent google result titles


lol




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