Hacker News Reader

Comment by jfoster | Hacker News Reader

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.

View on HN

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

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....

> 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.

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?

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).

Reply on news.ycombinator.com