Why is China smashing its tech industry?

Sitting here in Michigan when he stated that China didn't want to make the mistake of deindustrializing it hit me hard. China thinks we made a mistake in deindustrializing which is something those in the Midwest would agree with fully. It was a policy that worked for the coasts swimmingly but the Midwest paid the price for it.

This is an interesting theory but it’s not fully-formed. The author elevates popular gripes about the consumer internet industry innovating the wrong things like games and ad tech…

> ‘The internet companies in San Francisco and Beijing are highly skilled at business model innovation and leveraging network effects, not necessarily R&D and the creation of new IP….I wish we would drop the notion that China is leading in technology because it has a vibrant consumer internet. A large population of people who play games, buy household goods online, and order food delivery does not make a country a technological or scientific leader…’

This is missing the forest for the trees. Sure, Facebook makes money optimizing ad targeting and is kind of a psychological drain on society. They also wrote Torch and are pioneers of deep learning. Amazon (who “enables people to buy household goods online”) has completely revolutionized supply chain logistics, probably to an extent that people outside Amazon can’t fully appreciate.

Then the author basically goes on to say “China is divesting from consumer internet because it doesn’t help win wars”

> If you’re going to fight a cold war or a hot war against the U.S. or Japan or India or whoever, you need a bunch of military hardware. That means you need materials, engines, fuel, engineering and design, and so on. You also need chips to run that hardware, because military tech is increasingly software-driven… Technologies like Facebook and Amazon.com, which are fundamentally about leisure and consumption, went from being fun and profitable spinoffs of defense efforts to the center of what Americans thought of as “tech”. … [China’s leaders] probably took a look at their consumer internet sector and decided that the link between that sector and geopolitical power had simply become too tenuous to keep throwing capital and high-skilled labor at it.

Huh?? So China doesn’t want to foster an innovative software/internet economy because they want to win wars which require materials and chips and.. software? Not to mention wars are essentially a battle of supply chains, which as we said above is one of the key innovations of Amazon…

There’s probably an explanation for the tech crackdown, but this does not feel like the complete story. My theory is there’s a simpler and more short-sighted element to it: yes, it’s about power, but it’s simply about demonstrating the absolute power of the CCP within China, and tech giants in China have flown too close to the sun, pissed off the wrong people, etc.