Beijing is Silicon Valley's only true competitor | Hacker News Reader

Beijing is Silicon Valley's only true competitor

recode.net

157 pointsz3t1151 comments

It must help Chinese startups that many SV companies are blocked from competing in China. For example no competition from Facebook, Messenger, Instagram, Twitter, Snapchat, Youtube, Gmail, Dropbox, Vimeo, SoundCloud...

more info: https://en.wikipedia.org/wiki/Websites_blocked_in_mainland_C...

I've been told that the great firewall is actually more about protectionism than censorship. They know they can't really contain information, but they can block or degrade foreign services to favor their own. Of course this does serve a state censorship and surveillance agenda indirectly since home grown services can be more easily controlled.

As much as I can't stand Trump and could never vote for him, I do think he's one of the few candidates raising the issue of how unfair our trade relations are with China. The WTO limits tariffs but the Chinese have found tons of indirect ways to implement protectionism: the great firewall, manipulating their currency, making it hard for US firms to take payments in China, etc.

Europe has done pretty much everything the US wants, from spying on our citizens to foreign companies paying little to no tax. All you hear these days is how lame Europe is because we don't have a Facebook and how we should all move to the overpriced small town of SV. China doesn't only have a Facebook, it has a Google, an Amazon and an Uber. Which are in many ways surpassing their US counterparts. Since when was trade ever fair? I think the bigger thing here is just that China isn't in the US sphere of influence in terms of politics, but also in terms of culture and it's treating them quite well.

They have a Google in terms of making money, they don't have a Google in terms of usefulness. The search engines in China are unusable; my Chinese colleagues are far less efficient than we are because of it. When i'm sitting next to them with my SSH lynx to Google, I find answers fast which they cannot. Baidu is just only bought links (inherently bad quality) and Bing is, well, just a really bad search engine. That's not only me though; my wife and I are learning Chinese and we use songs, tv shows and movies a lot for that; when we ask 'can we use X' to the teacher (who is in Hangzhou) she always answers 'I searched but cannot find it' while the first hits on Google are it it including a video on Youtube (not in China) or Tudou (in China). Not because it's banned but because the search doesn't work.

Besides that you are right; especially things they do better; they have Facebook but the messenger (Wechat) is really were it is at; I use Wechat now instead of Messenger and it is superior even when you are not in China. Mainly because it just always 'works' and it's always fast unlike Messenger. Didi is better than Uber in many ways especially for the Chinese; for foreigners it's fine but Uber is more convenient for us as support is in English and most drivers for Uber speak a bit (enough) of English in China while the Didi ones speak no English at all usually.

Bing is not that bad as far as useful dev results go. I still use google at work (I'm an MS China employee) but Bing is perfectly reasonable at home, especially compared to the huge pile of crap that Baidu is.

Didi is great if you can speak a bit of Chinese. I've had a decade of perfecting my taxi driver Chinese though (since I seem to only use Chinese to talk to taxi drivers these days). YouTube is still way better than youku/tudou for content discovery...they have no "popular now" for non Chinese content.

Bing is really reasonable for dev search results. Honestly not sure if the people bashing it have ever tried it for that purpose.

I have in China and it's not compared to Google. My colleagues there are missing a ton of efficiency because of it. When I switch on the VPN (which mostly does not actually work otherwise it would stay on) and use Google, we work far faster and more efficient. I can even find datasheets which are only in Chinese faster on Google than they can on Bing.

I bet the MS employee has tried it for that purpose. He still uses Google at work.

I'm a researcher, Google still has benefits in that area. For dev, Bing brings up about the same information that Google does. And it is hard to tell the difference these days.

I also resent not being able to use google at home, so I like using it at work.

> And it is hard to tell the difference these days.

For dev results or? Because that's simply not true. Try finding things like knitting/wool shops in Shanghai on the Chinese Bing and on Google. You won't be getting any knitting done if you use Bing; all the hits you get there are closed many many years ago. There are many other examples from daily life which we encounter when in China; we're going there in a few weeks again and i'll jot down the differences then; there is an awful lot which you simply cannot find in Bing while it's in the top hits in Google. We might search for different things but 'hard to tell the difference' is really just weird to say.

Thanks for the interesting observations. No surprises.

In my experience, wechat is a spam monster - too many useless notifications and missing useful features like easy OTT voice calls and read receipts. I find iMessage and whatsapp (I use both hourly) vastly superior.

How old is your uber/didi experience? I find both now to be mostly useless to non-chinese. I tried to get an uber to the airport in Beijing last week and would you believe there is no POI in english for "airport". Search comes up empty. This seems recent, it wasn't an issue last year when I was travelling there frequently. I agree, if you do get a valid destination the uberx drivers have enough english to find you and get you where you are going. People's uber on the other hand... its good for entertainment...

This was a few weeks ago. It is worse than last year but I use a lot of mapping apps to figure out which characters to use. If that does not help me I usually just ask someone on the street.

Uber/didi are still technically illegal for China airport pickup, and operate in a very legal grey zone, it makes sense that the software would lack that POI artificially. There are ways around it, but local knowledge, at least some Chinese skills, is needed to get around it.

The taxi queue at BJS is quite reasonable most of the time, so I don't bother with didi.

But this is why doing biz can be hard in China, so many business models operate in grey zones while the government lets them go on while swinging a huge axe over their head. As another example, did you know electric tricycles are illegal throughout the entire country? And China's whole new goods delivery businesses are built around these....

In Shanghai, using Uber's carpooling feature it is much cheaper to take Uber than Didi. I have had quite a few rides (with 2-3 other people riding with) that were cheaper than it would have cost to take the subway. I'm not sure Didi has the algorithms ready to do this yet. I should say I haven't tried Didi in a few months, it may have improved since the last time I used it.

In Shanghai I find Uber quite cheap when not sharing. That is probably because I am used to London.

Agreed that it's overpriced in terms of real estate, but I wouldn't call it small; the Bay Area is home to over 7 million: https://en.m.wikipedia.org/wiki/San_Francisco_Bay_Area

The weather is also pretty nice in the South Bay (over 300 days of sunshine according to Wikipedia for San Jose). San Francisco technically gets a lot of sun, but anecdotally they get a lot of fog and shade as well, especially in certain areas of the city. There are other benefits to Left Coast living as well, but the rent is indeed high.

What can I say, Facebooks new headquarters:

https://www.instagram.com/p/05d5kiF_8X/

Tencents (wechat) new headquarters:

http://www.kikiwangarch.com/tencent-hq/

> Left Coast

Please don't do that.

Excellent point. The net beneficiaries of 'free trade' rarely have cause to question the policies that have given them great returns. The last 200 years of Chinese history is describes very clearly the impact of the imposition of free trading principles, where the freedom to say 'no' to free trade (of opium) was overturned at the barrel of a gun. To this day, China refers to the 'century of humiliation' and is hyper conscious of being the unequal trading partner of the Western world ever again.

China will no doubt have also learnt from the speed of economic development of the original Asian Tigers (S.Korea, Taiwan, Singapore, Japan) whose post WWII protectionist policies allowed domestic manufacturers the time to grow, compete, and in some case super cede with more mature foreign businesses when the time to open up finally came. We would not have Samsung, LG, Sony or Nintendo today if those governments did not protect their own industries from German, Italian, UK and US electronics manufacturers of that era.

It seems that China is one of the few countries to apply these lessons to the internet era, and has the political control and consumer base to make it work.

Whatever the personal agendas involved, it's a fascinating experiment. Perversely, it might even lead to a greater consumer choice in the end - sign up to WeChat, use Baidu - with innovation cycling faster due to the eco-system wide competition created by the firewall

If China had kept its isolationism from before the opium war for much longer, it's hard to imagine its emergence as an economic super power

Yes, I think I would agree. I would draw a difference between protectionism vs isolationism though. Protectionism is more like a temporary ringfence of strategic industries you want to nurture - the long game is always to unleash them into the competitive free market when they are fit for that competition. Perhaps that is indeed the real reason for the firewall - a plan, ridiculously long term plan - to conquer the world with domestically cultivated innovation

> As much as I can't stand Trump and could never vote for him, I do think he's one of the few candidates raising the issue of how unfair our trade relations are with China. The WTO limits tariffs but the Chinese have found tons of indirect ways to implement protectionism: the great firewall, manipulating their currency, making it hard for US firms to take payments in China, etc.

That's rich coming from the US.

Does the US have a reputation for protectionism? From a domestic point of view it seems like everything outside of steel and farming has been opened up

Auto industry. US/Canada have their own standards different from the UN standards the rest of the world adopts. Very few European cars are sold in NA beside a few high-end models.

Interesting point, but to be fair China is not the only one to find ways to implement protectionism. The F35 program or even Nasa contracting SpaceX could be seen as examples of the US implementing some level of protectionism.

Every nation has protectionism. Every single one. What's important is the degree of protectionism. So pointing out examples of a nation engaging in protectionism contributes little to the discussion unless you compare it to other nations.

> What's important is the degree of protectionism

The US complaining about China's protectionism is hypocritical. Let's talk about America's farm subsidies. How is that not competing unfairly? It leads to American agricultural produce being dumped on foreign markets at subsidized prices, destroying entire countries' agricultural base. What would you say is the degree of protectionism here?

Farm subsidies is not only about business, it's about national security: you subside food industry so that when you suddenly find yourself in the big war with trade routes cut, your population doesn't starve.

I'm not saying that these subsidies are necessary; I'm just saying that they should be analyzed with a different framework.

That's true but even more so when applied to the computer network. Nowadays, in case of a war, closing emails or zombying all Windows pcs could do more harm than food supplies.

And that's why for countries who aren't US closest allies it makes total sense to base military infrastructure on open-source operating systems and software (because let's be honest, Russian or Chinese military most likely won't be able to produce their own modern OS of comparable quality from scratch).

However, software and hardware on one hard, and internet on another, aren't the same thing: I don't see how one can seriously make the same argument in favor of great chinese firewall. It's only effective against general population, and doesn't seriously negate any cyber-threats, as far as I understand.

Why only military infrastructure? Image a war between, say the USA and Russia, and imagine that the USA manages to shut down or cripple all Windows machines in Russia, this will probably put the enemy on the kneels, even more than weeks of airstrikes. And it may also be better PR as it do not directly "kill" anyone. I have always thought that Microsoft holding 95% of PCs in the world is extremely dangerous, and can't get why American, with their admirable foundness of personal freedom and security, do not decide to put a stop to this anomaly. (Imagine, if 95% of world's oil was provided by one company?)

Because unlike oil, computers running on different OS create difficulties for users and developers. Apart from the point of national security, I think it's reasonable to assume that in an alternative world, where 20 operating systems competed on desktop market with more-or-less equal market shares, everybody would suffer from neverending compatibility problems, we would have worse applications, a lot of businesses would never succeed and a lot less value would be created in IT industry overall.

Hell, we don't even have to imagine — remember testing JS on every browser around 2007?

20 different operating systems would have shown the necessity of a common open protocol for the filesystem being it, and would have given much more space to creativity on the computer.

Not really,

Being self sufficient for war and producing excess agriculture product and dumping it on foreign markets are two completely different things.

And two can play at that game - china can make the same 'national security' nonsense argument about information espionage when it comes to the internet.

And in the modern world - the internet is more useful then food for a nation state - america can lose 30 million people and still win a total war as long as its nukes are functional.

Its all about protectionism.

I'll just repeat my extremely short comment:

> pointing out examples of a nation engaging in protectionism contributes little to the discussion unless you compare it to other nations.

I thought the implicit comparison to any country was obvious and well known - maybe not to Americans[1]. Can you think of any country that practices protectionism on agriculture at the same level as the US?

1. I would have thought post-"corn-syrup-gate" more Americans would at least know corn is heavily subsidized.

To make a good point, you also need to show that China doesn't have agricultural subsidies.

5 seconds of Google searching reveals a long lists of results:

https://www.google.com/#q=chinese+agricultural+subsidies

http://www.economist.com/news/china/21651272-others-cut-farm...

Agricultural subsidies are really not going to support your point. Most countries have heavy agricultural subsidies.

It's being implicitly compared to China, and well, to everyone else.

Every nation has protectionism.

Yes, that's my point. Not every one agrees with this and GGP's comment doesn't mention this fact.

So pointing out examples [..] contributes little to the discussion.

It adds examples of US protectionism so you can compare them with the ones from China that were mentioned before. Hopefully, this contributes to a more objective point of view. Why do I need to justify this?

Because China's space program and defense industry are protected as well. So if we're really going to try to decide whether China or the US are more protectionist than the other, in that comparison the examples cancel each other out. All you've done is add examples to both sides of the balance beam.

And we're still left with examples of Chinese internet industry protectionism.

SpaceX has better and cheaper rockets. I don't think they are exceptionally profiting from a "buy American" effect.

For the F-35 program, it contains a lot of technology which can't be found anywhere else in the world, and much of that technology was funded by the US government. For all the ridicule the project got, the corresponding projects in Russia and China are even worse off... If anything, the F-35 program is overpriced because there are no reasonable adversaries.

They could be, but I'd say that wanting to produce your own fighters (especially for a large military like ours) is reasonable. We're not complaining that the Chinese don't want to buy the F-35.

Isn't SpaceX substantially cheaper than any other alternative at this point?

Chinese social media and search platforms employee loads of people to only censor information. If any of the Western companies tried to match the level of censorship required it would dramatically increase costs of operation. If Facebook or Google agreed to censor their content to the degree that Chinese companies do, I believe they could operate in China. Google and Facebook claim to be morally opposed to censoring information, but it's unclear to me if this is really the case, or if spending the money required to self-censor is the impetus behind their "moral actions." Obviously if China got rid of the censoring then the market would be much more attractive from a profit-based view.

At the same time, if Facebook entered China today I don't know how many people would convert to using it like people from other countries do. WeChat is a really powerful player and a lot of recent Facebook Messenger features are basically pulled straight from WeChat.

Same with Youtube and Vimeo - Youku and PPTV are basically Youtube, Netflix, and HBO combined in one. Chinese users can watch Netflix and HBO shows for free via Youku and PPTV's license deals with Western content producers. Plus Chinese users watch much less user-generated content online, unless it is live-streaming.

1. You're conveniently ignoring the fact that Google did self-censor from 2005 to 2009. So the idea that it's "too expensive" being the reason is just FUD. Unsubstantiated speculation.

2. The question about whether or not Facebook/Google will succeed today is more misdirection. The real question is whether Google would have succeeded 11 years ago, and whether Facebook would have succeeded 7-8 years ago, because that's when they would have entered the market.

I don't think that fact disputes my argument. Let's consider a few assumptions to try to see a more well-rounded view of the firewall problem. Consider for a moment that all domestic firms must comply with self-censorship or be forced offline (see Papi Jiang's recent problems with cursing in her programming and being forced offline). From this we can assume that censorship issues are not only an issue for foreign firms, but also a primary concern for domestic companies. If we accept these assumptions, then censorship is just a market condition in China, the same way that bad infrastructure or government instability are market conditions in some countries. The difference is that through the internet, foreign companies can escape this market condition and still compete with domestic firms. Whereas in a country with poor infrastructure all companies are subject to the market condition. Without a firewall, domestic firms would be at a severe disadvantage because foreign companies would be able to easily escape government discipline.

Now, under these assumptions we can consider the Google case. Google tried to compete under these market conditions and lost. Thus, if we accept that the firewall is a way of the Chinese government extending market conditions to force fair competition, then any argument that Google could have beaten Baidu in the Chinese market is wrong.

Of course, this assumption may not be correct, but unless you work in the Chinese internet bureau it is not possible know the motivations behind the firewall. I'm simply presenting a devil's advocate view.

> From this we can assume that censorship issues are not only an issue for foreign firms, but also a primary concern for domestic companies

This does not follow from the previous statement. Also, it doesn't refute the reality that Google was fine with self-censoring between 2005 to 2009. The self-censorship system was already implemented (because, you know, they were already self-censoring).

No, it's definitely primarily about censorship. This is a one-party rule system...the party sets all of the policies at will, and their main goal is to keep themselves in power. The economy is merely a tool for them to keep themselves in power. Censorship and control of the media is a more powerful tool to keep themselves in power. They are much more worried about information flow than they are about protecting some tiny Chinese internet companies. That's not the mentality in China -- the mentality is..."let's help the big guys."

You're misrepresenting the real situation - China is the US's 3rd largest export partner, and we export over $200B of goods, and much more in services to China per year, which is greater than the GDP of silicon valley. Trump is proposing that we stop all of that, which will lead to a depression.

> The WTO limits tariffs but the Chinese have found tons of indirect ways to implement protectionism: the great firewall, manipulating their currency, making it hard for US firms to take payments in China, etc.

On the other hand, the west has profited quite a bit from the underdevelopment of China in the past. So I can't really blame them.

I think most economists will tell you the USA-China economic trade benefits both countries. Few will tell you it is "unfair". China get American money, and the USA get swath of cheap goods.

China's environment is ruined in the pursuit of cheap goods, which considering weren't really as cheap as China sold them for. China gets American money, which then goes back to buy America real estate just like Japan decided to do on the late 80s after investment oppurtunities started drying up at home. And we know what happened next....

Stop right there. Think of what you are doing. You are already trying to find positive values in Trump. Don't. Resist him. The whole world is in deep shit if he gets elected. Check https://twitter.com/ivan_hernandez/status/694388187284795392 as well :)

No, Trump has made many important and crucial things about USA. The matter of shoddy trade practices by China is one such thing. I guess, Trump is a right candidate for USA now given the situation of Islamist immigration and China and such things.

Absolutely.

Corollary: When running a country, protectionism of tech businesses can really pay off if your population is large enough.

Should every country follow Beijing's example? I'm not sure it leads to a good outcome globally, but on a per-country basis it seems like countries with large populations do have something to gain by acting selfishly.

Protectionism is a sorta tragedy of the commons type of deal, if everybody did it the advantage it offered would disappear.

Deleted comment

I don't want a world where my birthplace decides what news outlets I may read (can't have a non-local news source spill the beans!), what services I can use (use our local email variant, the government has approved it!), what products I may buy (special imported legally at only x20 markup after governmental approval).

I see myself as a citizen of the world, and I don't want to be put into a tiny nationalistic box as "my rightful place in life".

There are many wants such as the want to be able to move to wherever or get a job wherever. The fact is that there are serious impositions of limited mobility on everyone as it is. You can't just become an American citizen because you want that, why should have some sort of birthright to use their products for the benefit of their economy and their country. Does it not make sense to shore up the economic systems of your own country?

What's wrong if black people only pocket black people's money and white people only pocket white people's money?

(And of course if anyone chooses to engage with those of the wrong group, violence will be used to stop them.)

So is protectionism then the same as racism?

I simply asked a question. I see nothing in your argument which distinguishes between protectionism motivated by racism and protection motivated by nationalism.

What principle do you use to distinguish between them?

(Incidentally, if you want my view, it's the following. Racism and patriotism/nationalism is just a feeling and is intrinsically harmless. However they often motivate intrinsically harmful behaviors such as protectionism or other more direct forms of tribal violence.)

What does China actually gain from this?

For the government the answer is clear: locally situated companies that they have total control over. WeChat will obviously never pull a Google style "encrypt all the things" - they'll happily help the state reduce the credit scores of political dissidents and anyone who is friends with them.

For politically connected cronies (e.g. WeChat owners), the answer is also clear.

But if you are just a Chinese citizen, what do you gain? Inferior substitutes for the Google/Facebook/etc infrastructure? Isolation from the rest of the world?

[1] This excellent article argues that WeChat's "conversational interface" is just a crude hack around app store restrictions. http://dangrover.com/blog/2016/04/20/bots-wont-replace-apps....

China doesn't want to end up like Europe, which has no major Internet companies of its own on the same level as Google or Facebook. There has been immense political consequences and soul searching in the EU, and they are trying to push a single digital market concept to better compete against American firms. However, it remains to be seen how effective this strategy will be.

How does it benefit a Chinese or a frenchie if apps are provided to them by another frenchie, as opposed to by a foreigner?

Would I benefit if I received a haircut or transportation from a white man or an American as opposed to a Marathi?

> But if you are just a Chinese citizen, what do you gain?

Apps that are localized to their needs.

> Inferior substitutes for the Google/Facebook/etc infrastructure?

They aren't necessarily inferior. WeChat for example has a very intuitive privacy settings, which make a lot more sense than the complicated Facebook ones.

> Isolation from the rest of the world?

Many of these apps are expanding outside of China (To mixed success).

If apps localized to one's needs provide value then there is no need for protectionism. People will choose to use the localized apps.

India has a thriving ecosystem of local apps, but with negligible protectionism [1]. Uber, Ola, Zomato and others do a great job of localizing for Indian needs. Based on recent experiences I'd say Uber does a better job than Ola in this regard, in fact.

When I visited Malaysia, several folks I spoke to said they have a similar ecosystem.

The best thing is that Indians/Malaysians don't have to give up Gmail or Facebook if they don't want to.

[1] At least negligible protectionism w.r.t other apps. Ola competes on equal footing with Uber, but both suffer from protectionism w.r.t. legacy taxi providers.

I am not saying that their policy is good or that I agree with it. I just think there are two sides to the picture.

Many countries have protectionist policies, in particular in the automotive industry. The United States even had limits on Chinese parts imports[1]. China had an interesting policy to allow its automotive industry to grow through joint ventures with foreign companies (e.g. Hyundai[2]). They have done somewhat similar things with tech companies like Google and Microsoft, to nurther talent and guanxi[3].

Also in regards to Malaysia, the government has threatened to ban Facebook before[4], however not as a mean to allow local competition to grow.

[1] http://yaleglobal.yale.edu/content/protectionism-cannot-save... [2] http://repository.brynmawr.edu/cgi/viewcontent.cgi?article=1... [3] http://www.amazon.com/Guanxi-Art-Relationships-Microsoft-Gat... [4] https://globalvoices.org/2014/08/13/malaysian-government-thr...

Edit: Changed tense in regards to America's policy on Chinese imports.

I'm aware that protectionism is rampant around the world and that the US does it too. I also oppose that and believe US protectionism harms US consumers.

Every country on track to become a major super power enacts policies of protectionism at the beginning. America had one of the biggest. In fact, American independence spurred from imposed protectionism from Britain on tea. Later they imposed the same policies for their own benefit. It is only natural to do it.

I'd say it's very much alive now-a-days. If it wasn't for protectionism, the American auto industry would've collapsed long ago (not adopting international safety standards, inferior product line for NA market).

I wish the UK would block American SV firms in a similar way, to be quite honest.

You're undermining the fact that to build services of that scale is not trivial at all, and the fact they have managed to do it is the basis of why they are an effective competition to SV, now that they are as economically strong as the Bay Area is.

Once they are done with "replicating" SV, they'd start "inventing" too. What's stopping them from that?

I'm not undermining them - simply stating that there was a vacuum created by the lack of competition. Even cloning successful services at scale is incredibly difficult, but it's not 0 to 1, it's 1 to n. Nonetheless, I agree Chinese startups are using their current leverage to innovate in really interesting new ways.

I highly doubt there is a "lack of competition" in China. For each and every one of those "Facebook, Messenger, Instagram, Twitter, Snapchat, Youtube, Gmail, Dropbox, Vimeo, SoundCloud" you mentioned, there are a hundred similar companies.

In fact, I'd argue that competition is rife and more ruthless in China than in Silicon Valley. The moment you have a good idea, ten companies will appear the next day hot on your heels. Even if the American stalwarts were to enter the Chinese market, who's to say they won't be crushed by Chinese competition?

On the other hand, the customer base is also much larger in China.

With that said, reputation and word of mouth is everything in China. Before an app like Didi was the king, people were changing ride share apps every month. New deals, new coupons, new rumors, etc... The tide changes really fast here. Didi just happened to be the only app that could hang in there.

Regardless of how many people there are, if 10 people online say something is not worth using, no one else is going to use it.

Funny, I gave a tech talk at the Chekku (Garage) cafe a few years ago, and even then it had a pretty impressive energy in the place. The host that set it up expected maybe 15 people to show up, over 150 did.

China was and still is lacking some very important infrastructure for successful business development: a stable legal and contracts system, strongly enforced property rights, institutional access to capital, investment focused on demand rather than supply (see also ghost cities), and a well regulated stock market more based on revenue than pure speculation (not that the events of the last 10 years in the US stock markets haven't shaken my opinion on their strength).

Chinese entrepreneurs make up for these business problems the same way people that lack resources do in the states: through hard work and sheer tenacity. They're hungry for progress, and at the end of the day, that's what builds an economy.

I met some great people at Garage cafe that night, and they left a strong impression on me that Chinese entrepreneurs are going to do some really impressive stuff over the next ten years.

If you're ever in Beijing, I highly recommend spending an evening there. It was the highlight of my trip.

It's cool to see Cheku mentioned on here, they just celebrated their 5 year anniversary a month or so ago. Does seem like a lot of the cooler projects have left for greener pastures though, and the people that are left, ah well.

There's an endless supply of people to fill in those that leave.

Mind you, the greener pasture might just be Shanghai. Shanghai looked a lot more developed than Beijing, but I was only there for the day, so I didn't have time to really explore the city. It reminded me a lot of Hong Kong in many respects. I'd love to spend a month deep diving into the tech scene there.

From what I've heard the more mature startups with interesting end up moving to Shangdi for cheaper office space. That kinda leaves the has-beens and never-will-be's behind, but I guess that's to be expected. Even the founder of the place has started another venture a bit down the street.

We met some interesting people during their anniversary party, but then we met an equal share of idiots, so my guess it's 50/50 right now. The was this one guy drilling us on the market for phone cases in the US/Europe (f..k if we know, you're trying to compete with local retailers or something?), who didn't understand the concept of stealth mode, for example.

Not to say that there aren't promising founders out there, they just don't go to the events. Probably better that way, since the C2C attitude isn't just restricted to copying from abroad.

> We met some interesting people during their anniversary party, but then we met an equal share of idiots, so my guess it's 50/50 right now.

Oh there was plenty of that when I was there, but that was part of the fun for me. Easy to write off the dude I spent half an hour talking about Chinese punk rock bands with as a goober, but maybe he's the one that kicks off the Chinese version of Sub Pop records.

I gave up a long time ago on the idea of ever knowing who's going to do the awesome stuff. Almost more often than not it's the people I thought were the idiots and the lunatics.

Actually what I really liked about the people I met was that they were real characters with a lot of personality. I expected a lot of blank faced marketing pitch lameness but didn't get much of that (I'm sure it's there though).

Is that the one near Haidian book city? I had lunch there once, but I didn't notice anything.

I would try going at night.

Actually, if we count unicorn companies per capita, the number two after silicon valley is stockholm.

http://www.forbes.com/sites/knowledgewharton/2015/11/11/how-...

http://www.telegraph.co.uk/finance/newsbysector/mediatechnol...

Alternative source without interstitial.

Also comments here:

https://news.ycombinator.com/item?id=10693764

And actual companies here:

http://stockholmitregion.com/2015/08/31/stockholm-unicorn-fa...

Stockholm has produced a few successful startups, but it's not a competitor to SV. It's is a global competitor in telecom systems and games (though I guess many game companies are now owned by US companies). Spotify is basically the same service as when it started, just with more users. Stockholm has no real momentum in building something of their own.

There is a huge difference between the valley - home of the whole industry and Stockholm, which hosts a few niched companies.

Compare the hiring. In Sweden there is no demand for CS skills, there is no immigration programs for techies, etc.

Also, which is also important, Sweden is traditionally a consumer of technology, not producer (with exception of Ericsson, of course) - MS land where Linux is frowned upon outside academia and almost nonexistent in the market.

There is not even a dim analogy to what is going on in the valley.

the title is clickbait. If we are looking at Asia then India is the more relevant competitor. With a huge Valley-returned entrepreneur community as well as being open for Silicon Valley to do business, I am betting that India will grow faster. Indeed Ola and Flipkart's senior management comes from Facebook and Google at this point ... and were forced to innovate faster and harder when Amazon and Uber entered India. This happens across all categories of startups. Sure China has a larger customer segment than India at this point, but that is not something that is going to continue for long.

Oh and fundamental freedom and democratic rights go a long way to attract talent. Its not for nothing that talent chose to settle in the extremely vibrant and tolerant San Francisco area. Pretty much the exact same reason why Delhi and Bangalore drive most of the tech ecosystem in India.

The biggest problem I see with India is lack of infrastructure at the same level as China. That I admit, is going to be a make or break.

Valley-returned entrepreneur community doesn't mean anything in terms of innovation. App-powered logistics companies are no longer innovative; the wave was in the realization that commerce can be driven through smartphones and the internet, and that logistics can be massively improved by a combination of location-aware devices with abundant cheap labour from under-privileged population (not a value judgement). We are still a long way from doing ground-breaking scientific research. Innovative business models can only take us so far; fundamental progress has always been driven by the courage to think new thoughts, and that typically comes from the scientific community, not the business world.

That is where you are wrong. There is already fundamental work happening around vernacular linguistics, robotics (especially Grey Orange) and fintech.

People misunderstand how much technology needs to be built to be able to reconcile something like cash on delivery.

We are definitely far away from valley level innovation, but having people germinate the ecosystem with management styles and culture is extremely important.

What is fundamentally broken is somewhere else - the investor ecosystem. Indian investors are young, barely out of college and are professional MBAs without a lot of experience in a startup. It is very hard to explain the value of technical debt, innovation etc...when we can chase copycat business models without innovation. It's been extremely hard finding bthe right culture fit in investors. Combine that with the fact that most entrepreneurs have not become billionaires in India...so you don't have that savvy, experienced angel investors with deep pockets (the Paul Grahams or the Peter Thiels of India).

That is what needs fixing. China already has a couple of Jack Ma who are being the second wave of investors.

Interesting article but I feel it's light on actual hard data comparisons.

One fact is wrong though.

> Startups can achieve massive scale quickly, because the domestic market is 1.3 billion people, which is four times the U.S. or European population.

I don't know what definition of Europe (Western maybe?) gives you 300 million people. Demographically Wikipedia says Europe had 70 million people in 210 so presumably it's over 3/4 billion now.

I feel like people don't appreciate that Eastern Europe / Russia is Europe too for a lot of definitions of Europe. The E.U. includes a lot of Eastern European countries and Balkan states and Slavic states but not all. Ukraine and Russia _are_ European in many respects, be it ballet, opera, classical music, theatre, cinema, religion, architecture, you name it. Arguably modern Turkey is the least European _culturally_ because of the influence of Islam and Arab culture but geographically Istambul is closer to Rome than London is and when the Western Roman Empire fell the seat of power shifted to Constantinople and continued on for another, I don't know, more than _500_ years anyway.

Wikipedia say Europe had 300 million people in 1916, midway during the First World War (sorry world!), exactly one century ago.

side note: I have to chuckle to myself when some point out that air pollution in China will be a limiting factor. It didn't stop the industrial revolution in the UK or US so why should it stop China? And it wasn't _that_ long ago that air pollution was a real problem for London and LA, for instance. Judging by history air pollution will be a thing of the past within one generation (25/30 years) in China. You can quote me on that.

> side note: I have to chuckle to myself when some point out that air pollution in China will be a limiting factor. It didn't stop the industrial revolution in the UK or US so why should it stop China? And it wasn't _that_ long ago that air pollution was a real problem for London and LA, for instance. Judging by history air pollution will be a thing of the past within one generation (25/30 years) in China. You can quote me on that.

I can think of a few factors that make Beijing different from the industrial revolutions of the US/UK.

(1) In 2016, the brightest can move to pollution-free zones which don't really exist in urban China

(2) Environmental policies were spurred on by environmental activism which was enabled by free speech. It's not clear this will happen in China. They keep saying the air quality will get better, but each year is worse than the last, and more and more rivers are no longer usable due to intense pollution. I think there's something to be said for the whole country being responsible and being able to protest about local conditions.

That said, I wish China luck.

Aaargh. That 70 should read 740 :( 740 million.

https://en.wikipedia.org/wiki/Demographics_of_Europe

It don't know if the author noticed that the news out of China for the last year has largely signaled the disintegration of the Chinese development model, with the state relentless intervening basically everywhere to prevent the collapse of the stock market, prevent capital flight, prevent the massive bankruptcy of various firms, prevent worker unrest from economic dislocation etc.

With contradictions of the Chinese economy now becoming visible to the rest of world, even if the Chinese state continue to distort it's statistics, the idea that the Chinese tech sector is oh-so-vibrant-and-healthy seems much less plausible. The tech sector depends on the Chinese internal market and that just doesn't look good or healthy or competitive - especially not competitive. Western companies are shut out but it's pretty clear native companies need connection to stay healthy too.

I lived/worked in Shenzhen 2011-2012, and even then, young companies, founded by westerners and locals alike, had started targeting the domestic market. Companies in the hardware/manufacturing space had realized there was no need to spend time and energy pursuing western clients when there was such a large, underserved demographic locally.

It has struck me that the real key to American tech dominance is NASDAQ and the American stock market in general. It values tech and especially young companies a lot higher. In biotech, an IPO on NASDAQ will be valued at 2-3x one on Euronext. Frankfurt is even worse, which is why even German biotech firms don't IPO there.

The value that the American stock market sees in tech in turn drives investment in startups that can expect a more lucrative exit.

Ever wonder why so many European tech companies are bought by American ones? It's because any young European tech company will be valued higher as part of an American one listed on NASDAQ than it will be when listed on its national exchange, even with the conglomerate discount.

So much in the world depends on funding.

A better title would be, "The unspoken dread of Silicon Valley". Or else , "Yes they're coming for your job also". Possibly why this article has no previous comments

Spend 3 weeks in China, and maybe it is clear that it is, but spend 8 years in China, and it is overwhelming clear that it is not.

> Yes, they clone where they can. But cloning is starting to reach its max — there are just not enough successful ideas to clone. In addition, clones often fail in the local market due to different consumer behavior and needs.

China is still fairly closed, startups here in Beijing are 99% focused on the local market. Release a product with Facebook integration? Who even knows what Facebook is, is it like WeChat? Even in surrounding countries in China's sphere of influence that are just ramping up on the Internet now, like Cambodia, Vietnam, and Myanmar, Facebook and YouTube rule, while Chinese services are completely missing. Business models in China are oriented at copying business model X that has shown to work outside of China, and adapting it to the local market. Not because Chinese lack creative (believe me, they have plenty!), but because the VCs see it as low hanging fruit, a more pragmatic reasonable investment, especially since many of the big players are locked out.

Perhaps the low hanging fruit has been picked, but it is hard to see startups actually pivoting towards innovation, especially in the Beijing scene (maybe Shenzhen?).

> In China, there is a company work culture at startups that's called 9/9/6. It means that regular work hours for most employees are from 9 am to 9 pm, six days a week. If you thought Silicon Valley has intense work hours, think again. For founders and top executives, it's often 9/11/6.5. That's probably not very efficient and useful (who's good as a leader when they're always tired and don't know their kids?) but totally common.

This. A colleague recently transferred to a big e-commerce company in Hangzhou. They expect a lot of face time, in the office 12 hours a day, 6 days a week, but this doesn't correspond to productivity at all. It is very ridiculous. It isn't about "hunger or drive", but simply an old-fashioned throwback to the pre-00s when 6 day work weeks/12 hour days were expected from everyone, regardless of whether they were productive or not.

> The recent generation of Chinese entrepreneurs is driven too much by money and financial success ("get rich fast").

A lot of people are in it for the money, they aren't really technologist. Additionally, engineers who are decent run to and are pushed into management roles way too quickly, given that (a) your success is judged by how many people are working for you and (b) China really lacks good leadership/management. This means that practicing engineers are mostly very junior, which has its own problems.

> Finally, Chinese startups lack clean air.

San Francisco/Bay area is attractive because it is a good place to live, and was initially attractive because it was cheap (garage startups in the valley). Beijing has none of that...the housing bubble means even a small apartment costs $1 million, the air is incredibly horrible, the traffic...maybe if Beijing cleaned up its act, it could be an international draw, but that is a long way off. Beijing also has a shockingly low expat population, something like 40K in a city of 20 million.

> And, yes, China has massive issues, from freedom of speech (The Great Firewall) to competition that can get out of hand in terms of business practices.

I always find it funny when people come to visit and expect to use Facebook and Google docs. Even VPNs are seriously under seige lately, with the internet situation has gotten noticeably worse over the last two years, which I didn't think was possible.

I am not a trans-Pacific entrepreneur, so take this with a grain of salt.

From what I can tell, China's most fundamental problem is that it's taken an inherently protectionist stance on large businesses and investment, one which is completely incompatible with the sort of business done in Silicon Valley, which requires heavy international cooperation, recruiting, business mobility, and fluid investment, as well as the opportunity for frequent, unpunished failure without consequent shunning.

As it was explained to me... If you want to do business in China and you're not a citizen, you damn-well need to find one to start a Chinese business which can transact with you formally. If you want to scale your business and you don't have a midlevel member of the Communist Party running your HR department, you damn-well need to find one who can drink baijiu with the right people. If you want to scale your business to large enterprise levels and you don't have enough bribes in the right pockets to be part of the Chinese economic planning process, you damn-well need to get there; You might not be the first to do so, even if you try.

Don't do these things, and the rug will be yanked out from under you every which way possible, from licenses to immigration to financing to every sort of red tape. The Chinese Communist Party may have liberalized its way into a functioning domestic economy, but it's not willing to take its central planning thumb off the scale or permit full capitalist investment without political influence. The consequences of this mentality extend beyond tolerable levels - if the central plan is that this new startup BaoJao is the greatest thing ever, why would they permit your competitor to try and defeat it? The default stance is doubt about you and your enterprise, particularly if you represent foreign involvement.

One of the enduring differences between Silicon Valley and the rest of US capitalism is the lack of noncompetes, which is a step forward relative to the rest of the country for thriving competitive enterprise, but China is not two steps back, it's fifty steps back.

> As it was explained to me... If you want to do business in China and you're not a citizen, you damn-well need to find one to start a Chinese business which can transact with you formally. If you want to scale your business and you don't have a midlevel member of the Communist Party running your HR department, you damn-well need to find one who can drink baijiu with the right people. If you want to scale your business to large enterprise levels and you don't have enough bribes in the right pockets to be part of the Chinese economic planning process, you damn-well need to get there; You might not be the first to do so, even if you try.

This is a fishing story.

> Don't do these things, and the rug will be yanked out from under you every which way possible, from licenses to immigration to financing to every sort of red tape. The Chinese Communist Party may have liberalized its way into a functioning domestic economy, but it's not willing to take its central planning thumb off the scale or permit full capitalist investment without political influence. The consequences of this mentality extend beyond tolerable levels - if the central plan is that this new startup BaoJao is the greatest thing ever, why would they permit your competitor to try and defeat it? The default stance is doubt about you and your enterprise, particularly if you represent foreign involvement.

This is a conspiracy theory.

What's a fishing story? I haven't heard that phrase.

Anyway, yeah, it's funny how often you meet experts on Chinese business who haven't actually done business in China but can go into elaborate detail about why it's a bad idea. I met lots of Western entrepreneurs out there - there are tons of foreigners running bars, restaurants, outsourcing firms , language schools, etc without much hassle from the government. You can even get around the minority ownership rule by incorporating in HK, or at least you used to be able to. I wouldn't start a big internet company out there, or a factory, but small companies in certain sectors seem to get left alone. It's probably more anarchic than the West, actually, which was one reason I liked it out there, though I've never seen myself settling there long term.

"I wouldn't start a big internet company out there"

We're not talking about bars and restaurants.

Small internet companies in Silicon Valley all want to be big internet companies. To do that they need investment, ownership, freedom to transact contracts and appoint employees at will. You can set up a small startup in somebody's garage anywhere in the USA, but you are unlikely to scale to a billion dollar company. Few get to be unicorns, but those that do drive the cycle for everybody. They're enabled at the early stage by having near-zero regulatory compliance requirements, and nearly zero people that they have to convince that they have a genuinely good idea. This is not the way business is done by foreigners in mainland China.

I can't figure out what you're saying.

Yes, China's legal environment is unfriendly to building a large business as a foreigner. But no, foreigners in China can start tech businesses with "near-zero regulatory compliance requirements" - I knew 3 white guys in Chengdu who started a mobile marketing consultancy in their apartment.

China is basically anarchistic in some areas, authoritarian in others, is what I'm getting at.

I'm guessing fishing story == a huge exaggeration.

As in, when you catch a normal sized fish and then go home and tell your friends about the massive fish you caught and how it put up a fight for two hours.

It's not clear if many of these things are good or bad or if they're any worse than silicon valley. I wouldn't count any of them as serious obstacles for Beijing tech success.

Focused on the local market. I often run into SV companies that I'd like to use as a customer but can't because they only serve America. Either because of IP restrictions, money transfer, shipping, or they just haven't figured out other countries yet.

Having people in it for the money is a sign that something's really happening. It's not just hobbyists doing it for fun. I'm sure most SV startups are in it for the money too. Nobody really things a pick-up laundry service for rich people is altruistic or fun.

Young smart engineers getting management responsibilities. Sounds like every startup with a 25 year old CEO.

Lack of good leadership? Maybe they're effectively doing flatter organization structures. That's a cool trend in SV.

High cost of living. SV is famous for its wildly inflated house prices but that's not stopping it.

Bad internet: Crippling if you're a foreigner and depend on foreign services. Hardly noticeable for locals using Chinese services. American's equally have no access to major Chinese internet services because of the language barrier yet that isolation isn't stopping them.

Underhanded business practices. America has patent lawsuits which a big company can use to stomp out pretty much any small software company they want. Everyone's infringing somebody's patent but they mostly survive because they're too small to matter.

Long hours and no time for family. SpaceX is famous for that and they're doing pretty well.

You're rebutting almost all of seanmcdirmid's arguments by essentially saying "it's not a problem because some SV startups/companies do it too." But:

1) You don't become the next Silicon Valley through cargo-cult entrepreneurship.

2) SV is successful in spite of those things, not because of it, because SV is starting from a position of strength and inertia. SV succeeds in spite of its current problems because of the massive self-reinforcing feedback loop and culture it developed decades ago when these things were not issues.

When SV was becoming a startup hub, most of what you and seanmcdirmid talked about were not problems. Housing was cheap, software patent lawsuits were not prevalent, many people were hobbyists, and so on.

Well yes, I suppose you're right. I think I'm just a bit jaded seeing every positive story about China filled with comments like "they'll fail because they're not doing it like us". There are plenty of ways they're different and most of them probably seem bad. Maybe most of them really are bad, but somehow they're still doing pretty well. It must be a complicated combination of factors. I don't think it's fair to predict failure just because some things are worse. They do have much stronger protectionism provided by the government, which is surely a massive advantage over American companies. They also have a cheaper yet well educated workforce.

This is how the Chinese press takes criticism: be insecure, claim it is an instruction to do things like the west, be like the west, then handle the criticism with some convenient what-about-isms. Everytime I go and read chinadaily, it's the same technique over and over again, everyday.

At anyrate, the topic is inherently comparative (BJ is the only next SV!), and no, it really isn't. Maybe you can just brush it off to "BJ isn't SV because they aren't doing it like SV", but even then, al, the criticisms are valid and, if improved, could make the city much better irrespective of any comparison.

I guess then that is also it: they seem to be really good, the pollution hasn't caused an economic implosion yet, people are somehow still alive, and someone is willing to spend 1 million $s on that bland 90 sqm apartment. It's like 2006, my friends are laughing at me because I'm saying real estate is definitely in a bubble to the retort "if it's a bubble why hasn't it popped yet?".

The companies are completely protected, yet China keeps wanting more access into our markets, and we give it to them. Truth is, reform is all to China's benefit, while the west benefits greatly from the messed up status quo where China strives to be involved in global high value work but fails, and still derives most of their income from low value production, basically destroying their environment for our benefit.

what-about-isms are pretty standard rebuttals to any criticism on China these days. I just got used to it :).

After the air gets cleaned up housing bubble pops, it could become a really cool place for startups. But those fixes come first; China cannot fix its problems by encouraging tech startups first.

> Focused on the local market. I often run into SV companies that I'd like to use as a customer but can't because they only serve America. Either because of IP restrictions, money transfer, shipping, or they just haven't figured out other countries yet.

Most (all?) of the companies to succeed in SV have been successful internationally. How many countries does didi serve vs. Uber, wechat vs. whatsapp, Google vs. Baidu. Startups graduate in China without any global reach, at all. A market of 1.3 billion vs. 6.5 billion.

> Having people in it for the money is a sign that something's really happening. It's not just hobbyists doing it for fun. I'm sure most SV startups are in it for the money too. Nobody really things a pick-up laundry service for rich people is altruistic or fun.

I guess it's a cultural difference. I can't imagine doing work just for the money. Many in SV love the chase, even the subject, it is their passion at the paycheck is just a bonus. In China, few people have at luxury, just like soccer or basketball players play for country glory, not for fun, so it shouldn't be a surprise that China has yet to grow winning teams.

> Young smart engineers getting management responsibilities. Sounds like every startup with a 25 year old CEO.

Even that 25 yro CEO can benefit from having a seasoned engineer. In the west, you can go pretty far as an individual contributor...being more valuable to the company than your people manager for example; in China it seems like everyone wants to get into management as soon as possible, that being an IC last 40 is a failure.

> Lack of good leadership? Maybe they're effectively doing flatter organization structures. That's a cool trend in SV.

Confucian culture loves hierarchy, flat isn't a thing here.

> High cost of living. SV is famous for its wildly inflated house prices but that's not stopping it.

It didn't start out like that in the 70s. Also, how many Americans or even non-Chinese are looking to buy property in Beijing vs. Chinese looking to buy property in sillicon valley. One is completely insular, the other is crazily international.

> Bad internet: Crippling if you're a foreigner and depend on foreign services. Hardly noticeable for locals using Chinese services. American's equally have no access to major Chinese internet services because of the language barrier yet that isolation isn't stopping them.

All great until you need to do work, even as a Chinese. Try finding factual information about cancer using Baidu alone. Want to do a search on google scholar? Tough luck, the world is limited to China.

> Underhanded business practices. America has patent lawsuits which a big company can use to stomp out pretty much any small software company they want. Everyone's infringing somebody's patent but they mostly survive because they're too small to matter.

The courts get to sort it out in the west, in China you might just hire some thugs, or at least some hackers or officials, to teach your competitors a lesson. Rule of law has its benefits as well as drawbacks.

> Long hours and no time for family. SpaceX is famous for that and they're doing pretty well.

At least it isn't a pure face thing And they have a tangible productivity increase to show for it. In China, it's all about the face.

I could not agree more. After being in Beijing for most of 2015 on a project the city has mostly not much going for it. The pollution, the traffic, the noise. Living quality is something else. Working hours generally suck and even the additional income is quickly consumed by buying overpriced imported goods.

I spent about 2 years total in China (over several periods) and a year in HK. In university, thought about working in China's tech industry but eventually decided there were better opportunities in the UK, for a variety of reasons.

I did like living in China though, and after 2 years working in the UK considered moving back. Spent 2 weeks in Beijing in 2014 and checked out the local startup scene a bit. Unlike this guy I didn't really optimise my trip, I just went to a coworking space and asked people there if they knew of any big tech meetups (London has multiple meetups every night, with one big one (100s of attendees) at least once a week). Things seemed much quieter in Beijing - there were maybe 2 or 3 small tech events each week listed on meetup.com, for example. Maybe locals are meeting up with some other site, idk.

The other big reason is there seems to be on average, a lower level of investment in people and processes. In the West I've seen companies that were clearly in for the long haul, where the management really tried to put good systems in place, attract good people, train them, etc, and companies which were more opportunistic, weren't picky about who they hired, had a band-aid approach to problems, etc. Chinese businesses seemed skewed towards the latter (this seems like a developing country thing, it will be interesting if they become more like Japan as they develop).

Oh, and the latest ruling clique appears much more Marxist than their recent predecessors. That's not a promising trend.

I work at a Shenzhen startup that is global first and doing very well. I know a couple of other companies here that are too, and are opening offices abroad. They're all hardware, and that may count for the difference as the environment in Shenzhen for developing physical products is unique.

I think Shenzhen has more of a shot at being China's SV than Beijing. For one thing, it has good proximity to HK, and much less interference from the central government. They also have Tencent, it isn't all, hardware. Otherwise, maybe hangzhou (alibaba) or Shanghai (everything), but not Beijing...it is too close to the emporerer.

WeChat payments seem like genuine improvements. But agree it's going to be very challenging for these companies to expand overseas. Perhaps still easier for China to expand outside its borders than outside companies expanding to China.

That window is closing quickly. If Chinese companies can't even expand to its own backyard, even in Chinese speaking markets outside of the mainland, what chance do they have in the rest of the world?

> pre-00s when 6 day work weeks/12 hour days were expected from everyone

Was that really the case in US and Europe? Honestly curious.

No, my comment was about China alone. I was kind of shocked when I first visited in the late 90s and found people working on Saturdays as normal practice. This wasn't changed until the mid 00s.

Unless there is no air pollution in Beijing. One of my colleague just moved from Beijing to Bay Area because of the severe air pollution of Beijing.

Native Beijing guy here. I'd like to answer any question about the city or the startup ecosystem.

Is Beijing the biggest tech hub in China? Silicon Valley is really a long corridor of tech between two cities, SF and San Jose. Is there something similar in China? Would you say that China has multiple tech hot spots or is Beijing it? Is Beijing more like New York in this respect? Do you see what I'm driving at?

Beijing is absolutely the counterpart of Silicon Valley in China with similar area and much bigger population. Although two of big old three (Baidu, Alibaba, and Tencent) is located outside of Beijing, most Internet companies especially new stars such as Didi, Meituan-Dianping, Xiaomi are all here.

Beijing has two tech hot spots now: [Zhongguancun](https://en.wikipedia.org/wiki/Zhongguancun) and [Wangjing](https://en.wikipedia.org/wiki/Wangjing_Subdistrict).

Beijing is most certainly the software center of China. I work in a Shanghai startup and when we raise funding we have to go to Beijing to find the VCs. Beijing also has the best universities in China, so the talent is there. China's version of the Paypal Mafia is more like the Microsoft Mafia. Look inside of most top software companies in China and you can almost certainly find a handful of execs who worked at Microsoft around the year 2000. Microsoft's offices were (are?) in Beijing, so most of them hung around after they left to startup or join other tech companies.

Shenzhen is the center of the manufacturing world, and as the article points out they have DJI which produces 70% of the world's drones. Essentially anyone who wants to produce something cheaply and quickly will have something being produced in or around Shenzhen. If the Internet of Things really takes off into a mainstream industry then Guangzhou and Shenzhen will become a secondary hub of innovation. I just heard recently that Cal-Berkeley is establishing an engineering graduate program with Tsinghua to be hosted in Shenzhen. For a university right outside of Silicon Valley to do this is definitely saying something.

Shanghai has a decent number of finance related startups, but people in Shanghai tend to be motivated to work in large multi-national companies. Go to a startup in Shanghai and you'll find mostly people from outside of Shanghai without the best education - not saying that it's impossible for these people to create a great company, but it's a far cry from Beijing where Tsinghua and Beijing University students are being recruited to early stage startups.

Alibaba and a few other tech companies are in Hangzhou, but that city still lacks the pre-A, A series type companies that Beijing and Shanghai have.

Chengdu in the West has offices for half of the Fortune 500, but although I've heard the local government is pushing hard to attract entrepreneurs, their startup ecosystem seems to still be lacking. It's possible that if some of these employees leave their Fortune 500 employers to startup then the city could become more of a hub in the future.

Beijing is more like the DC area, but even then the comparison is flimsy. As a long time Beijing resident, I would say Shenzhen and Shanghai have more to offer. Beijing's importance is mostly driven by the government.

Beijing's importance is not driven mainly by the government (although open-mindedness of the government definitely contributed to this), but by the ecosystem: best universities (Peking University and Tsinghua University among dozens of others) and best research institutions (the Chinese Academy of Sciences and research centers of big companies), most big VCs, IT communities/media, and most important, entrepreneurs.

In Beijing, if you have time, you can attend some interesting IT meetup everyday. It is what you can not see in Shanghai or Shenzhen.

Talk to somebody in Shanghai or Shenzhen startup community. You will have the insights.

He needs to spend way more than 3 weeks in Beijing before jumping to conclusions.

I'm curious, where exactly do you think his conclusions are wrong?

I lived and worked in Beijing for over 5yrs and I think his conclusions are in general pretty accurate. Which is fairly impressive for spending only 3wks there.

I lived in Shanghai and worked in the startup community there from 2012-2013. Im happy to answer any questions people might have. Very interesting space. The government is taking a very active role at developing startup "infrastructure", but it looks incredibly different from anything in the West.

The government is taking a very active role at developing startup "infrastructure"

Could you elaborate on this statement? Are you referring to financing of startups, or more? Thank you for the offer to answer questions!

Investment into incubators, co-working spaces, government projects such as tech parks, building office space, streamlining of company registration and visa's, doing official visits (XiJingPing at Cheku, China's finance minister at 3W Cafe), yeah, they're pretty involved in things.

I've heard about these places from colleagues. Every local government is starting incubators, but many of them are like ghost malls. Which is funny, because they are converting a ghost mall in Beijing Zhongguancun near my office into an incubator space....

I know someone who works at one of the government backed incubators in Shanghai and he told me that a few of the companies they have are pretty promising, but there are a lot of accepted companies who don't have much of a shot. Startup solve a national problem of having too many college graduates and not enough job opportunities, so some of the incubators just soak up some of the extra graduates with the hope that maybe they could make something useful with time. Of course, with continued government support the incubators could improve and become more focused, but for now it seems at least a few are a way to provide jobs to what may otherwise be unemployed college grads.

Yeah, haven't bothered checking any of them out tbh, don't really see the draw of it. I do have a friend who was trying to get a spot in one of them, but the materials he showed me seemed pretty sterile. Can't fault them for not trying though.

What are the best startup spaces that you found? How would you define the startup community in Shanghai?

Can someone name one innovative or disruptive technology that has come out of China in the last 20 years? Honest question.

I am admitting ignorance here. I have this assumption that many Chinese companies just copy/refactor existing ideas and apply them to their protected market.

Lower-priced but "lower-quality" is one of the quintessential properties of a disruptive technology. You can probably apply this to all electronics manufacturing, from smart phones to consumer drones. Could smart phones have become so ubiquitous if each cost over $1000 to buy?

isn't that enough? they have a much larger population so if they copy then they could still become much larger and end up winning in the long run

I know this may sound flip, but as far as innovation goes the Chinese* have not invented anything since gunpowder. Of course SV, is much more than just innovation: it's access to financing and technical and sales talent. Along these dimensions, Beijing may represent a competitive threat.

*only those based in China. Chinese people freed from strictures of autocracy, colonialism, communism, and kleptocracy have made great innovations.

I am pretty sure India would be building its own devices, OSes , search engines, social networks etc if the govt gets more protectionist. There is no reason this can't happen overnight.

It has an endless supply of cheap labor and high end talent.

It (protectionism) has worked well for them in the auto, pharma, telecom sectors where the local companies are market leaders despite serious competition from the west.

Labor in China isn't really that cheap and limitless any more. And the sheer number of university graduates to select from slightly distorts the overall quality of education in China.

Dude the air was clear the day you were wearing masks. Creadabilty lost.

Yesterday the air quality was yellow (i.e. Clean air), but I still ran into an American Chinese girl wearing a face mask asking for directions. Weird....

Lack of clean air to breathe and rampant corruption and authoritarianism seem not very conducive to a successful startup culture. There is a huge churn of chinese money trying to find places to go and get a good roi. It is not clear that this will last though.

Also, I find it unlikely that without a free/open software ecosystem like linux or bsd they will get very far. Building a startup culture on a general computing foundation of massively pirated windows os is just not going to work.

Lack of clean air to breathe and rampant corruption and authoritarianism seem not very conducive to a successful startup culture.

It's a test case to see if cyberpunk novels were accurate in describing neon-lit, polluted urban corporate wastelands like Chiba City, I guess.

I've been proselytizing linux over here. Ubuntu Kylin is pretty cool to set up for people, but the wifi cards on a lot of laptops don't take too well to it.

Jiayou! But I think there has to be innate demand for it, and for the right reasons, not just because it is cheap and available.

Why Kylin and not Xubuntu or Lubuntu?

The difference between Ubuntu and the two variants you mentioned is solely on the application layer and as long as they don't use the buggy KDE5 connection manager applet, WiFi won't be affected by Xubuntu or Lubuntu. So this boils down to preferences of desktop environments. I've always wondered why, instead of full distros, these variants weren't just supported more officially as flavors to choose or change to. Yes, you can install lubuntu-desktop from inside a stock Ubuntu install, but there's always some configuration and setup that's missing.

Well, the OS I'm running is Ubuntu, and Kylin is "Ubuntu for China", with fcitx set up for Chinese already, and a separate Software Center that has a delightful page that shows Linux alternatives for Windows software. Haven't quite gotten around to playing with other linux distros to be honest.

Interesting. The Chinese devs I work with hate Kylin (probably because it's approved by the Party) and seem to really prefer other Chinese-created variants, particularly Lubuntu and Xubuntu. I've got no experience with Kylin, so it's interesting to hear these points.

The lack of good investment options has something to do with money chasing tech startups, I agree.

> Building a startup culture on a general computing foundation of massively pirated windows os is just not going to work.

This really isn't true anymore. Much of Beijing startups are built on Linux/Android, piracy of Windows seems to be way down in general.

> I find it unlikely that without a free/open software ecosystem like linux or bsd

In Taiwan and China, it's common to use Linux in university and to work on Open Source projects (see OpenWebmail and Linux Virtual Server projects, for impressive successes.)

The Chinese government was pushing their Red Flag linux, but I'm not sure where that is now. Certainly Linux would be used in their home-grown CPU and superconductor efforts.

However, once students graduate, their employers are less likely to understand making Open Source contributions at the business level.

Reply on news.ycombinator.com