How China smashing its own tech industry could lead to economic dominance
Shared by sole-fields · 119d ago · 5 comments

Interesting article on Chinese economic policy in the wake of recent crackdowns on a slew of big consumer tech companies.

But notice that China isn’t cracking down on all of its technology companies. Huawei, for example, still seems to enjoy the government’s full backing. The government is going hell-bent-for-leather to try to create a world-class domestic semiconductor industry, throwing huge amounts of money at even the most speculative startups. And it’s still spending heavily on A.I. It’s not technology that China is smashing — it’s the consumer-facing internet software companies that Americans tend to label “tech”.

sole-fields · 119d ago

There's a great comment on the piece, too, which the author recognizes:

I think there’s a much simpler explanation. Alibaba and Tencent are mostly owned by non-Chinese investors. Alibaba is majority owned by Yahoo, SoftBank, and various US investment funds, and Tencent by Naspers and various US investment funds. I’ve had a Chinese friend tell me that most Chinese people don’t care much about Alibaba because most of the profits go to Americans and Chinese people can’t invest in it anyway. That makes them easy targets because they don’t have a sufficient domestic constituency (in the same way that Huawei is an easy target in the West because it lacks a domestic constituency). The US government could never go after Facebook etc. to the same extent because they would have to deal with lots of angry US citizen shareholders who can vote in the next election. But if Facebook’s investors were mostly European and it was traded in London, it would probably be a much bigger populist target.

ArchStaton · 118d ago

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sole-fields · 118d ago

Agreed. It feels more like hacking down healthy trees from China. Will be interesting to see it unfold.

Klog · 119d ago

Growth is interesting. Like... Netflix laying off 130 employees a few decades ago is what ultimately made them profitable and gave them an edge to continue to IPO (I may have my chronology off there).

coryz · 119d ago

trim the bansai