Edit: which Chinese tech companies are actually dominant? All of them are copies of American tech companies propped up by their government. Where is the market penetration into the USA? Where is the competition? There is none.
As for the part about being an uneducated factory nation, the latest PISA findings from 2015 would have China scoring higher than the US on math (10th vs. 25th) and science (6th vs. 40th), but slightly lower than the US on reading (27th vs. 24th).
but you have to also think whether he's biased in wanting to push the view that the next big tech hub is in China, because he's invested in the region. Making the hype machine so that when time comes to exit, there's plenty of doofus who will believe the hype and buy into the market.
it's very hard to know what to believe, and even more effort to do research. Most people won't be doing it, so it's an effective method to generate hype.
He puts his money where his mouth is. I made another comment here that it was refreshing as it didn't predict the collapse of China which has been peddled for the past few decades by so-called experts - they could peddle any view they want with no financial repercussion.
Secondly, even if Moritz was biased and published this article for his own gains, it's not as if we (foreigners) have easy access to invest in the region.
> it's very hard to know what to believe, and even more effort to do research. Most people won't be doing it, so it's an effective method to generate hype.
I heartily agree with you here, but you have to admit for every article like this, there are 10x more about the imminent demise of China, so I don't buy the argument that this article's hype will override 'collapse' articles which generate much more clicks.
LOL.
First, that's the same argument they were making back in the day for Japan (the "uneducated factory nation", the "copy cats", the "cheap knockoffs" etc). Funny how that turned out.
Second, labor costs are not the relevant factor, so automation wont matter much to bring factory jobs back. It's all about the supply chain:
http://www.businessinsider.com/you-simply-must-read-this-art...
https://www.economist.com/free-exchange/2012/01/23/apple-and...
Not to mention that Chinese factories can and will also invest in automation.
Third, "uneducated factory nation"? Where does one get that information from, the John Birch Society Bulletin?
https://www.theguardian.com/science/2018/feb/18/china-great-...
http://bruegel.org/2017/08/china-is-the-worlds-new-science-a...
Oh, and as sibling says: "the latest PISA findings from 2015 would have China scoring higher than the US on math (10th vs. 25th) and science (6th vs. 40th), but slightly lower than the US on reading (27th vs. 24th)."
It's easy to make fun of previously underdeveloped nations that started from an uneducated and less advance point 30 and 60 years ago, but the problem is that they can catch up (like Japan and South Korea, an insignificant economic wasteland after WWII, did). Especially if their rivals are on the decline themselves. Rome didn't last forever.
They're still "the third-largest in the world by nominal GDP and the fourth-largest by purchasing power parity (PPP). and is the world's second largest developed economy".
I'd take that level of irrelevance any day.
Besides that, Japan's situation doesn't tell us much.
>Which innovative companies does China have that aren’t complete rip offs of American ones?
DJI would be a good example. They're the Apple of drones, and are doing great in the gimbal business as well. No American company comes even close.
There are others of course, and more will emerge. Already they make phones on par with the best of the Android world.
Besides, which innovative companies did Japan have before the 70s that weren't complete rip offs of American ones? And which innovative companies did the US have (before the mid-19th century) that weren't complete rip offs of European ones? And yet here we are now...
Great drones. We have google, they have cheap manufacture produced drones.
I keep hearing “China is coming”, “they will have more”, ....
It never comes to fruition. That have a massive population supported by manufacturing wages that will all lose jobs when automation takes over.
Well, different countries use different strategies. Half of the US economy is based upon the country's military might, and (through it) imposing favorable deals, bullying, controlling oil and trade routes, IP laws and so on (plus "quantitative easing financial policies" and trillion dollar bailouts, subsidies and handouts to Detroit and co). I'll take Japan's "quantitative easing financial policies" any day...
>Great drones. We have google, they have cheap manufacture produced drones.
Well, they also have their own Google: Baidu.
Heck even Google's page-rank style concept was pioneered by a Chinese (the founder of Baidu) before Google was a thing:
"A small search engine called "RankDex" from IDD Information Services designed by Robin Li was, since 1996, already exploring a similar strategy for site-scoring and page ranking.[18] The technology in RankDex was patented by 1999[19] and used later when Li founded Baidu in China.[20][21] Larry Page referenced Li's work in some of his U.S. patents for PageRank." (Wikipedia)
>That have a massive population supported by manufacturing wages that will all lose jobs when automation takes over.
They have a massive internal market, 4 times the US in population, strong growth, have been the world's largest economy back before (for many centuries), have a much older and more resilient culture, have the tech and the factories, and they will own the future, as the tired Europe and US give up the spirit.
Rome didn't last forever either...
>I keep hearing “China is coming”, “they will have more”, ....
Well, I don't know for how long you "keep hearing that", but if you hear it for e.g. the last 2-3 decades, then it's also accompanied by massive Chinese growth those last 2-3 decades.
So it's not like you merely hear it without anything coming out of it. On the contrary, it's one of the most well supported statements.
If you mean why they haven't already taken over the lead, well, it took US nearly a century, plus two whole world wars that torn and beat Europe up, to get to be the world player that it has been the last 70-80 years.
The world economy is not like the tech market, to expect something to go from start to domination in a few years...
Bluntly, this is BS. A bit of the US economy, yes. Half? Not even close. But you seem to have an ax you want to grind with respect to the US, and reality would not serve you as well as hyperbole.
I'm not talking directly -- like the arms industry and the oil industry and so on. I'm talking about the cascading effect that pumps up and propels the rest.
I suppose, though, that your claim might be true of the fraction of the US economy that happens where you are...
In a number of gaming sectors, it's already done. Steam is majority Chinese players, mobile gaming revenue has been from China. Steel (until the tariffs) has been dominated by cheap Chinese offerings, killing off a bunch of suppliers in the last 15 years. I dunno what you're talking about, but reality doesn't care what you think anyway.
I'm not sure we've travelled to the same China. The country is capable, talented and very driven. If you ignore the surveillance state it has a lot of same characteristics that once made America exceptional.
Even if this wasn't written by someone with the Sequoia Capital brand behind him Ive seen enough anecdotally to believe it.
That may be true, but I do find it refreshing over the thousands of articles claiming that China would collapse over the past few decades (and yet, somehow these experts failed to predict the AFC, GFC, dot-com bubble,...). Surely you consider those click-bait as well.