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tl;dr Internet fails to turn China into America; Americans frightened, baffled.
Simply due to their firewall...
That's may well be a factor, but there are many examples of countries without firewalls and censorship etc that are equally 'unamericanised', so it's unlikely to be the only factor.
And culture! Chinese culture is different than Western one. Chinese companies understood the particular demands of the market in the early ’00s, when Internet access was still scanty. Ten years ago, for example, eBay tried to dominate in China but failed, partly because many small businesses—the places that might otherwise have used eBay to sell their products to the world—didn’t yet have computers or a connection to the Internet. At Alibaba, however, founder Jack Ma understood this, so he assembled a huge sales force that fanned out across the country, teaching merchants how to get wired. (He also outcompeted eBay’s PayPal with Alipay, which holds a buyer’s payment in escrow until they receive their goods and pronounce themselves happy with the purchase; this helped build trust in online markets.)By catering specifically to the needs of Chinese youth and focusing on social games, Tencent QQ beat out Microsoft’s Windows Live Messenger service. Zhenai.com, although similar to services like Match.com, offers counseling and debriefings to its customers, which fits well with the indirect manner of affection display in Asian culture.
The biggest surprise of the 21st century is that the Internet and massive outsourcing did not turn China into a country with policy acceptable to western powers.

The other comperable surprise is that massive debt fueled growth in China did not lead to a collapse and bailout by western powers.

The next surprise will be the complete substitution of the entire commercial and financial infrastructure of the world by Chinese institutions. Check out CIPS (alternative to SWIFT) or UnionPay (alternative to VISA/Mastercard networks), Asian Infrastructure Inxvestment Bank (alternative to wold bank), and of course the Shanghai Cooperation Organization (alternative to NATO), and the Shanghai Gold Fix (alternative to Comex and London Gold Fix).

Some are even saying the Chinese have got a new global currency in the works that's not the SDR or the dollar. However, I really doubt that is going to happen, at least in the next few years.

At this point China's debt bubble is too large to have a "bailout" from the West. China will have to do it on their own. The ratio of debt growth to GDP growth looks pretty grim as of 2016. Without having experienced an economic correction in such a long time it is possible even many of the companies which appear strong, innovative, and important have serious underlying problems which were easily masked by growth.

Japan may be a rough guiding point to China's future path. After the growth miracle ends, a decision has to be made on the debt. Whichever decision is made the debt will be absorbed by someone. Like Japan, China can continue to do amazing things but the consequences of that debt will throttle back future potential, especially if China's economy fails to rebalance and they choose the Japan option (zombie debt.) The greater geographic size, ethnic diversity, and far lower GDP per capita may make it much more difficult for China to pacify the population during a economic disruption.

China matters a lot but drawing a linear line upwards based on previous trends is a big mistake.

> The biggest surprise of the 21st century...

The century is only 15 years old. Give it time.

Social revolutions take decades to hatch after the conditions become right, and decades more of "happening" before there is any certainty about what they turned into.

The only thing that was ridiculous was the idea that a country with 1/3 of the world population would stay irrelevant forever. But outside of that, the future is incredibly uncertain.

not 1/3 but 1/5
I would be careful with any blanket prediction.

China has a lot of question marks, really I think more question marks than at the turn of the century. In addition to the size of the debt mentioned earlier (much of it in state owned corporate enterprises, their often over-bloated nature often cited as a problem in itself), you have a market system that is somewhat undeveloped and subject to excessive government meddling (see China's stock exchanges and managed floating currency), constrained future growth due to future demographics (eg: an aging society with no "demographic dividend", a situation no doubt not helped by the previous one child policy), and problems with pollution and corruption that -- as Chinese society gets richer -- they are starting to get annoyed by more and more.

None of these mean that China is on the road to ruin, of course, and without a doubt China will continue to play a large role in the world economy in the future. However, I do think that how the Chinese government handles some of their financial system decisions will determine whether your prediction on finance infrastructure holds true. At present, I would not consider the Chinese financial system mature or stable enough to overtake Western ones, and I think the Chinese government has to make some hard decisions before that happens.

I'm here in Beijing and I just experienced this first-hand. Amazing.

Came over here for the launch of the Chinese translation of my book, Soft Skills, and I am amazed by the tech community here.

When I saw the word innovation, I was expecting something a bit more than web/mobile chat and e-commerce apps. Not saying that the Chinese startup scene is in any way worse than SV, but I think we've put the bar for what constitutes innovation way too low everywhere...
I guess they mean innovation in the business sense rather than the technical sense. I.e., finding new web-based business models.
Those sound like well solved problems. Not sure there is much to innovate there.
So what are the actual innovations? Opening coffee shops and having lots of e-commerce transactions != innovation.
Though as a Chinese programmer, I have no doubt we will achieve some great innovation here, the author of this report apparently doesn't know internet industry well, for choosing a bad example. Xu Dandan himself is just a joke here, and himself is widely considered as a bragger.
Where there are factories and competition, innovation will happen. When we started manufacturing in China, we had experience building and they didn't so we had to show them how to do everything. Now they manufacture without our oversight, have the relationships with suppliers, and figure out how to do things faster, cheaper, and higher quality because it directly benefits them.

Meanwhile, we don't have the experience building things that they do with their equipment and people.

The only problem is believing that other people innovating hurts us. It doesn't.

Not read TFA, but in my country (Western Europe) there's so much talk of how in the future we're going to live off our ideas and innovation, not manufacturing, and there always seems to be this.. underlying... thing that the people who run the factories don't have any ideas of their own. So we're going to sit here and think up brilliant things, and send them off to a land of smoke stacks and cheap labour to be made. And I just don't see how that system could ever be anything other than temporary. After we've outsourced all the dirty work, when would the expertise out there not insource the thinking work and cut me out? I would if I was them.

(And honestly it is very hard to ignore the colonialist undertones of this thinking)

France motto since the seventies: "On a pas de pétrole mais on a des idées !" (We don't have oil but we have ideas).
That's a great argument for a business model like ARM has, where all profit comes from IP licensing and no manufacturing is done in house. A bit ironic, then, that SoftBank just acquired it.
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SoftBank are Japanese, not Chinese.
I wasn't around back then so someone else will have to fill in, but isn't that what happened with Japan? First they just copied American TV and Radio designs, killing American manufacturers simply by undercutting them on price and then BOOM suddenly they were inventing the Walkman and all-in-one camcorders (Marty McFly: All the best stuff comes from Japan!)
>>..isn't that what happened with Japan? First they just copied American TV and Radio designs..

That's correct. My dad worked in international sales for a company that makes industrial equipment, from the early 1970s until the late 1990s.

He says that in the early days, whenever he sold a product to a Japanese company, a few months later, one of his Japanese competitors would mysteriously come out with a product that seemed to look and function exactly like the one he just sold.

It seems to me that it's not that different from how people learn - you start by copying what other people do, and even though you're not doing anything "new," you're learning the low-level basics of why things are the way they are, and then you use your unique perspective to spot ways to improve upon that.

Exactly - personally I can't complain since I'm Swedish and one of our largest tech companies (telecom innovator Ericsson), got their start by ripping off Graham Bell designs before they were patented in Europe
The problem would seem to be that you can't build a deep economy on just ideas. Sure, whoever works for Apple gets nice paychecks, but most people don't. Trickle-down economics has always been a smoke screen for trickle-up power.
It takes decades to build up a world-class university. Maybe centuries.

Certainly one day there will be cutting-edge research and innovation - the things that create a lot of value - in many countries. Some would say that China already has these things. But so what? Does China having those things mean that Europe shouldn't? Does having manufacturing there make China better at these things?

Not every country needs to do heavy manufacturing, any more than every country needs to grow its own food, or every country needs to mine its own raw materials. Specialization is fine.

>It takes decades to build up a world-class university. Maybe centuries.

This has been accurate so far but it could be because the idea of disrupting university education and research is only now gaining prominence. The incentives are bigger than ever.

If a substantially leaner alternative to either is found somewhere, it will at least be tried in China. Whether it succeeds will then depend on many factors.

I think that you may be failing to separate the dissimilarities between two different ideas, "service economy vs. industrial economy" [1] and "robot revolution". The two share the single commonality that I think you've latched on to, that they both involve people whose entire job is to build ideas that they don't manufacture themselves, but are otherwise completely separate and the thoughts you've noticed don't transfer.

The "land of smokestacks and cheap labor" thought comes solely from the division between service and industrial labor, noting that, at the present moment, someone has to be doing the industrial labor. The badness of industrial jobs is an unfortunate consequence of bloody evolution horribly murdering anybody that tries to fix it [2]; service jobs bottom out in overwork and psychological problems, while industrial jobs bottom out in pollution, disease, and dismemberment. The problem is now is that part of the global economy is forced to remain on industrial labor when they should have advanced to service labor.

The "in the future we'll live off our ideas" thought is entirely derived from idea of the robot revolution, which explicitly rejects the very existence of the "land of smokestacks and cheap labor". Indeed, the robot revolution will force everybody into service jobs, because it will do to industrial jobs what automation has already done to agricultural jobs: automate them all away.

1: https://en.wikipedia.org/wiki/Service_economy#/media/File:Gd...

2: http://slatestarcodex.com/2014/07/30/meditations-on-moloch/

You are exactly right. There is this inherent superiority complex in this thinking. And I think I know the reason why:

The elites in western nations aren't builders or doers. They are talkers (lawyers, bankers, politicians, MBAs) who have told themselves their entire lives that builders don't matter as much as the talkers. They love Steve Jobs, but wouldn't know who Woz was if you asked them. They talk about the "jobs of the 21st century" but make fun of the technology experts by calling them nerds on the floors of Congress.

If this is your line of thinking, then the whole "let them build the stuff, and we'll do all the ideas and innovation" makes perfect sense. Its a perfect example of why the remaining "doers" in the US have such a deep-seated hatred of all politicians and government. I'm talking about the remaining auto-workers and the oil-drillers, etc.

Fantastic comment. This country seemingly has a genuine disdain for its laborers, an attitude that has pervaded into every section of government and will surely bite us in the ass much like Brexit did in Britain. It's very telling that I've yet to read a single comment showing support for that movement online yet 51% of the voting population approved of it.
It's impressive that we manage to disdain laborers and intellectuals at the same time.
It's classic, text-book divide-and-conquer! You tell group A that group B are "liberal college-educated elitists" and you tell group B that group A are "gun-loving Bible-thumping rednecks" and let them go at each other's throats!
53%, you mean.

There have been plenty of comments supporting Brexit online. Even here on Hacker News. Perhaps you just didn't spot them, or were not reading the right sites to find them.

I don't doubt that they existed, but the disparity seen in online forums would have you believe that it was a fringe far right <1% group that voted for it, certainly not 53% of the population.
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“Now they manufacture without our oversight”

I know several people who's job is overseeing Chinese manufacturing. They need constant oversight and quality inspection otherwise everything falls apart very very fast.

I'm currently living in South West China and, while this may sound culturally insensitive, there is a very very serious cultural problem with quality and attention to detail. People will work really long hours, but will always do the very bare minimum. It's at times absolutely staggering and infuriating. The reason manufacturing is in China isn't so much because they know how to do things, but because they will work long hours doing mundane work (because of very strong commitments to supporting their families) and because the supply chain is located here. If you need 10 thousands units of some widget by next week you can get it. Its quite likely it will be defective, but you can just buy another 10 thousand from the factory next door. The same infrastructure doesn't exist anywhere else

The reason innovation will happen is because Chinese people are doers. They just go and do things instead of talking about it all day. And sure, they do a lot of dumb things, but at the end of the days it all seems to work out. Thats why they own half of Africa already

Which is oddly similar to Silicon Valley, where there's a very serious cultural problem with quality and attention to detail. People will work really long hours (due to a misguided hero belief, so we're different there). And sure, they do a lot of dumb things (Color? Uber for pet walking?), but at the end of the day it all seems to work out.

Except, it doesn't - not for China, which is slowly choking to death on the effects of costs externalized to the environment, nor for America, due to the costs externalized onto everybody who's not a company.

>> "In April, the U.S. government officially named the Great Firewall a barrier to trade."

That's absurd.

That it took that long, yes, I agree. Imagine how pissy the world would be if the US banned any competing internet services that were not headquartered within its borders.
Even with US companies in China following all the rules, the US still is unable to beat Chinese companies. This is the real issue, and it's the US companies fault that they can't be innovative enough to figure out the Chinese market. All I see is a lack of innovation on the part of the US; hell, the great fire wall is innovative.
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> it's the US companies fault that they can't be innovative enough to figure out the Chinese market

Western business failures in China are more attributable to a lack of understanding of the business culture and excessive regulatory barriers and oversight applied on foreign companies than any innate superiority.

Negotiating business deals in China requires an extensive understanding of the culture to approach it properly, whereas Western negotiations are hinged mostly around profits and liabilities. Things like face/reputation, the unstated but expected mutual bribes/gifts (direct and to family/authority figures) and networking are new to them, and they stumble through it, giving the appearance of incompetence. China is pretty hostile to wholly-foreign companies, too, which means western companies are stuck wasting time hunting for local partners and making these deals instead of just selling products and services.

Not only that, but even after negotiations have been sealed, there's other cultural differences that get overlooked. This can be seen in the dozens of stories where a Chinese exec/partner resold business secrets, or stole clients and relaunched a competing service. It's obvious there's some sort of disconnect in the communications and expectations. Western companies are used to contracts having a lot more value.

Don't get me wrong, some amazing things happen in China. Shenzhen is beyond impressive. But given the large cultural differences and how hostile the government is to foreign-operated business, it's rather glib and disingenuous to claim that the US companies can't "figure out" the Chinese market.

The "market" is just buying and selling, but the part that's causing problems are the government's artificial limitations on the market. The foreign companies aren't allowed to ship their existing products as is, and through the process of certification, the idea is often stolen and reimplemented. The Chinese government isn't really interested in fixing this, as it's more advantageous for them to have local businesses than foreign businesses. It'd be one thing if a foreigner opened up a store and nobody ever bought anything, but half of the failures are taking place before product launch with staff and partnership meltdowns.

The Chinese "market" itself suffers deeply from government manipulation. Plenty of citizens mock their government's obnoxious nanny attitude with slang like "river crab" and high VPN use. Government corruption is a common complaint, and many of the richer populace got rich through excessive greed and collusion in the initial privatization of business. There's still the overly nationalistic people who believe the propaganda and descend on foreign news like locusts in their eagerness to devour the criticism, but there are plenty more who don't.

It's not like the west is inherently better or anything. We're all having problems with business regulation.

It's a massive barrier to trade. It means Chinese people can't access services from many American companies. It's gotten so bad that I can no longer plan long working trips to China, because I simply can't work remotely with any reliability while in the country. It's little different from a law which just says "Foreign internet services aren't allowed here" except with better enforcement.
Something that's deep, nebulous, and legally deniable is better than an explicit law requiring enforcement. Therefore a language/culture barrier is better than any trade law. Likewise, something that's technologically enforceable (even if imperfectly so) is better than something requiring bureaucrats to enforce. Therefore the Great Firewall is better than any trade law.

Therefore the combination of the two -- Great Firewall plus language/culture barriers -- is a truly powerful combo. (What would that be in Magic the Gathering cards?)

Chinese have not innovated yet in anything in the present day. The examples given are just taking individual parts, and copying them all in one system.

The main difference is that in China there are not software and business patents. There are patents but in practice you can do whatever you wish. Also the Government can and actually does whatever pleases them. Someone knocks your door and tells you: We have decided you have to teach those guys what you do so they can do the same you do.

It is not innovation, but forced collaboration. Almost any technology is bought from outside, they will offer 10, 20 times(or whatever necessary) more salary(than what they actually earn) to key workers outside China with tech experience in order to go China and train Chinese replicating products in China. Once in China they will teach other companies to replicate the technology. This process is totally natural and periodic in Middle Land.

It has nothing to do with innovation. In fact the System makes it really hard to really innovate in China: Only traditional products like Silk, Porcelain and tea are protected from counterfeits. The rights of the individual is always less than the collective. The education teaches you submission and Confucian values, not risk taking and disruption.

Never forget that disruption and innovation is synonymous with change, and the first thing they will want to change is their Government.

Their system have worked fine for them until now, coming from total poverty(most people in China actually remembers the famine that killed millions, you see people wasting food as a symbol that they are "rich" enough to waste it),the advances have been impressive, but is not a model for developed countries.

> Chinese have not innovated yet in anything in the present day.

Really? Because it seems to me that Facebook Messenger is now copying WeChat.

I wouldn't call any messenger "innovative" as of today.
I was really impressed by WeChat while living in China. Quite a few times I thought "hmm, I wish we had that back home"

To counter the argument that it's not true innovation, just a re-combining of existing ideas... what other type of innovation is there?

China could learn a lot from FB about social surveillance..
> The education teaches you submission and Confucian values, not risk taking and disruption

It's not the education alone that makes people risk averse, but the culture in general in Chinese and South Asians. It's changing for good though.

Also, enough of bashing their government. A good democracy would have been great, but as you said it's working for them and that's what all matters. There are many psuedo democracies across the world where people still live in poverty.

The state-of-art deep learning model, RestNets, is invented by local Chinese team.

China is apparently still in catching-up mode. However, I won't go too far to say Chinese people cannot innovate at all, which we all know is not true.

> The education teaches you submission and Confucian values, not risk taking and disruption.

That is extremely stereotypical thinking. This is like saying that American education teaches you to be obedient consumer who thinks he is precious snowflake.

It's different culture and innovation is takes different forms.

Thats quite a good description!
> This is like saying that American education teaches you to be obedient consumer who thinks he is precious snowflake

Uuuuuh...

Is it that China hasn't innovated in anything recently, or is it merely that you are not aware of it?

There certainly is a lot of copying. Most Americans feel ashamed to just rip off someone else's idea and run with it, but that sentiment doesn't exist in China. The result is a lot of shameless copycats, which is often interpreted as a lack of innovation. But not all Chinese ventures are copycats, and the copycats can end up innovating too.

Of course Chinese entrepreneurs can innovate. That being said, the CCP has been making it more difficult. As of this month every single mobile game needs government approval at cost to the developer.
On the other hand there is less red tape on biotech and pharma and Chinese government is encouraging innovation.

New Chinese biotech companies are dong well. gene therapy, proteins, viral vector therapeutics, cell therapy, small molecules, antibody engineering.

Certainly those couldn't go horribly wrong with less oversight, right? As opposed to mobile games...
Let's play write the article that should have been written!

Here's my favorite example of Chinese innovation: the ESP8266. It is original hardware and 1/10th the price of the equivalent offering from TI (their CC3000), with more speed, more features and better reliability.

The esp8266 is cheap because they used expnsive to design, cheap to produce process(40nm). Quallcom had a similar chip(QCA4004 ?), probably with similar manufacturing costs, which they sold only to big companies, probably at a higher price.

Also when you come to judge that chip, don't forget china's interests in the chip industry and in security. I wouldn't be surprised those helped the esp to become reality.

The ESP8266 is an ingenious little chip. It's fully integrated - no external balun required unlike many of its competitors, no calibration by board manufacturers, just drop in and use. They reached the scales required to justify their NRE costs by making it a dual-use chip that could serve both as a a WiFi interface for cheap Android tablets and a standalone IoT design.
Cadence (Tensilica LX3 core) isnt exactly Chinese. What espressif did that was really smart was re-purposing design created as an SDIO WiFi chip for tablets into IoT darling, pretty much _by accident_ (someone in Shenzhen leaked SDK into english speaking website). There is a very strong unwritten rule among Chinese electronic firms of not leaking documentation outside the great wall, because that weakens their technological advantage (for example try finding documentation for one of chinese LCD scalers).
Kleiner Perkins has currently offices in four cities: Menlo Park, San Francisco, Beijing and Shanghai http://www.kpcb.com/china

China has markets, opportunities and innovative people. Things are just all somewhat different.

Blocking Facebook and Google may have been brutalist censorship at first. But as a policy for encouraging innovation it is pure genius.

Will be interesting to see when/if some of the Chinese social networks become popular outside China.

So would it be safe to assume that you support Donald Trump in his plans to force companies to remain in the USA by increased tariffs on imports?

I don't necessarily agree or disagree, because it's really out of my realm, but it seems like a similar approach.

Block competition from outside the country...

I cannot vote in the coming us election.

I just find it slightly ironic that had Facebook and Google (and probably the us government) been accommodating for Chinese requests to censor uygurs during their uprising some 10 years ago then the situation likely would have been completely different.

Now Facebook and Google are missing out of a big high growth market - a market that ultimately may foster companies and innovation strong enough to challenge us social media dominance.

brutalist

I suspect you would benefit from googling this word.

This is also what is Germany doing with privacy laws. Datacenters in EU, no Google analytics ...
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Chinese companies are certainly innovating and they are picking up R&D teams anywhere on the planet.

For example you have Andrew Ng as Chief Scientist at Baidu Research in Silicon Valley even though Baidu pretty much only operates solely in the Chinese market.

The key being, "in Silicon Valley"

As an analogy, Russian VC money supported FB. I don't believe that is an argument that Russia is a tech innovator.

>what’s more revealing is how Chinese firms have taken the best tech and adapted it.

Only felt like skimming the article but it seems that quote is at its base. There's a difference between "adapting" other people's work and "innovation". There is also a difference between manufacturing products and creating the original idea for those products and making them.

I've also heard Foxconn drives a lot of what is possible in the future versions of iPhones and advises Apple on component level innovations.
Article provides only two specific examples:

You go on Facebook and you can’t even buy anything, but on WeChat and Weibo you can buy anything you see

A more recent trend: live-streaming sites where people pay real money to reward performers with virtual gifts. (You sang beautifully, here’s a digital Lamborghini, dear.)

I might grant the first (with reservations), but the second is laughable (and was tried without success here in the early days of social networking). I can't help but think this article should be titled "Chinese internet companies flourish in Chinese market". Well duh - even aside from the "virtual protectionism" of the GFW, Chinese companies are more likely to understand the preferences of Chinese consumers than non-Chinese companies. This is important, but it isn't exactly tech innovation.

How many HN startups are localizing to Mandarin? Language alone provides a massive market barrier that leaves opportunity for regional companies to thrive. But that barrier works both ways - what Chinese internet companies are thriving in the world marketplace? The best example I can think of is Alibaba, but that is strongly tied to Chinese manufacturing. Is anyone using WeChat or Weibo outside mainland China?

I personally am very excited and encouraged by the emergence of China as a modern, educated populace. Great things will come from bringing another 1 billion humans online and contributing to the world marketplace - tech is one of the great positive-sum games. I'm looking forward to it! But this article is a pretty poor illustration.

Also, as a Norteamericano, I'm deeply offended by statements like "America want's to believe China can't..." - we're not all xenophobic Trump supporters, not even most of us.

"Is anyone using WeChat or Weibo outside mainland China?"

I don't know about Weibo, but WeChat is available in 200 nations and 20 languages. Over 70 mil people use WeChat outside of China. They seem strongest in south and south-east asia. Wechat penetration into the mobile markets are: Malaysia 38%, India 22%, Philipines 19%, etc. My understanding is that they have aggressive inititatives underway in Brazil and South Africa.

So, not super-awesome, but respectable.

Most people I know in South America use WeChat.

Edit: That's incorrect. I was thinking of WhatsApp.

In addition to that, there are lots of Chinese people outside China, and in my experience they all use WeChat. They will also attempt, with varying degrees of success, to get the non-Chinese people they communicate with to use it.
I'm from Brazil and nobody I know uses WeChat. Most never heard of.
22% of Indian mobile users use WeChat? I'd like a citation for that, since in my experience less than a percentage use anything other than Whatsapp or Facebook Messenger.
They do not need to be evenly distributed across the country. It could be a specific regional area. The stat could also just mean "installed and is used." It's possible that there are a lot of Indians that use it to communicated with business partners / etc in China.
Yeah the idea that there could be a country innately incapable of innovation is absurd. Sometimes people ask me if I am worried about India taking my job (programmer) and I always say no....not yet.
One problem countries like China and India could face are brain drain - if all the brilliant engineers leave the country for the west. Of course, the US is doing their best to make sure that doesn't happen.
And THAT's what's changing on the ground in the tech world - especially in China. I work for a multi-national that as a matter of course offers globally mobile careers and we've struggled to attract high quality talent vs. the BATs of the market.
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BAT stands for baidu, alibaba, and tencent
My response is more along the lines of "in the case of almost all of the major tech industry successes you can think of, there existed diminishing returns to technical brilliance". Strategy, execution, and product design are so much more essential at the outset of any venture that isn't dealing with significant technical complexity. It doesn't take a genius to learn full-stack development. It's not even too difficult these days to pick up enough stats and ML to do some serious damage on the data science side of things.

Innovation is instead about having a system structured in a way that encourages and rewards risktaking (in expectation).

I think you misunderstand, or at least the article misunderstands. It's not innovation as such, it's the ecosystem. Even without network effects Chinese companies are starting to stand on their own. Xiaomi is maybe even second to Apple in the consumer electronics industry (especially with western brands, like Nokia, folding), DJI is probably the leading drone manufacturer, Taobao (while not really available worldwide) is far better than eBay.
> "This is important, but it isn't exactly tech innovation."

That's a strawman really. The article never made any mention of tech-innovation, only innovation of all kinds. And marketplace innovations that cater to the Chinese market, count just as much as marketplace innovations that cater to the American market, by the likes of FB and Uber.

Regarding whether this point even needs to be made: I think it does. As someone who's lived in SF, I can't quantify it, but I've felt the general perception that many people have, regarding Chinese goods/companies being cheap knock-offs of American ones.

Some of this perception is understandable: due to lack of IP enforcement, there certainly are many Chinese companies on the low-end that make an entire business out of copying American products pixel-for-pixel, and then selling it at a lower price. However, this perception is still flawed in that there are numerous companies at the high-end doing great work. As Americans, we don't hear much about, or interact with these high-end companies, because they aren't trying to cater to us. Hence why articles like this one are very educational.

I guess my definition of innovation is different? From what is described in the article, I see China using western technology to copy western software and web tech, while at the same time blocking competing platforms.

Not to say that I think China can't innovate, just that I don't think the article gives any examples of it.

> we're not all xenophobic Trump supporters

You had an intelligent response until you decided to generalize people who hold a political view different to your own.

Based on usage it does suggest being both xenophobic and a Trump supporter is worse than just xenophobic rather than suggesting all Trump supporters would be xenophobic.

PS: I don't support either major candidate. But, the non-xenophobic trump supporters seem more reasonable.

Unless it's repetition used as a rhetoric device, but I hold up the benefit of the doubt.
Given Trump's predisposition towards expressing sentiments that suggest an attitude of uninhibited prejudice with respect to broad swathes of the population on the basis of their race or gender, it stands to reason that people willing to support him are, if not expressly endorsing those positions, willfully participating in the legitimization of a man who has given the US electorate enough reason to believe he would propone dangerously divisive policymaking were he to be elected. This tacit endorsement is rife with implications about people holding this particular political view. 10/10 political correctness.
Trump praises Chinese business, how is that xenophobic ?
I seem to remember a soundbite where he said the Chinese were kicking the US's ass all over the place, and he was the man fix it.
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Why do they have to succeed outside of China right now? That market is so large that they don't have to until they are already huge.
I said the same exact thing in much fewer words. Yours is the most upvoted, mine is the most downvoted. I don't care about karma, but that people here behave rationally. HN voting should be based on facts, but its often not. It's prone to the same knee-jerk subjectivity you find on low quality sites HN likes to deride. Stop the hypocrisy HN. You're better than this.
In the 1980's America wanted to believe that Japan couldn't innovate too. Something similar was said about the Soviet Union before that.

I don't know how much this has to do with Trump or any other politician.

"America is the global leader in innovation and creativity." We've nourished ourselves on that narrative for many decades. It makes us feel secure and important.

We also like to tell ourselves that we're the world's only superpower and that we're the guardian of democracy.

> Something similar was said about the Soviet Union before that.

And Soviets were not so good innovators, actually. Their innovations were mostly in military and due to enormous R&D financing (which, in turn, lead to their fall).

Who's going to sign up for a service censored and actively monitored by the Chinese government when they don't have to?
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This is important, but it isn't exactly tech innovation.

I think you got it backwards. Successful business with scale leads to technical innovations in many consumer-facing companies. Did Facebook in its early days have technical innovation? Once the traffic of Facebook picks up, though, they innovated like crazy. They invented Hive. They made HBase great again. They created Cassandra. They built Scuba and Gorilla. They turned Zookeeper into amazing Zeus. They are running massive stream processing systems. Their MySQL clusters are world class. The list could go on and on. It's same for successful Chinese companies. Did Alibaba innovate technically when it was a mere online whitepage? Probably not. Is it innovating now? You bet. How many companies in the world could handle the traffic as Alibaba does today, especially in 11.11 every year? As a result, Alibaba is a major player in MySQL community and Hadoop community. It ended up rewriting Storm because it had to run Storm cluster of thousands of machines. It invented its own database called OceanDB. It made substantial improvements to Flink. It created its own file system called Tair. It has massive deployment of container-based infrastructure. Its technical blogs are worth studying carefully. The list could also go on as well. We can talk about Tencent in the same way: do you really think handling hundreds of millions of daily active users does not require significant technical innovation?

On the other hand, how many YC companies are innovating technically? How many so-called unicorns have real technical innovations? Does Airbnb really have amazing technologies? Excellent execution and awesome engineers, for sure. But technical innovation on at most a few millions of listings that can be easily handled with a small database cluster? I doubt it. Or maybe they do, but at least it's not that obvious from their technical blogs. Does Postmates have technical innovations? I would even argue that it should not even be their focus.

>>is laughable

Touchwood. Back in early 2000s, a lot of people laughed at the idea of Mandarin being taught in schools.

>>Great things will come from bringing another 1 billion humans online and contributing to the world marketplace

They don't have to go global. Jack Ma: “eBay May Be a Shark in the Ocean, But I Am a Crocodile in the Yangtze River.”

Anyway an extra one billion internet users don't necessarily mean great things ... commercially maybe it gets a lot greyer in other areas like social.

> Touchwood. Back in early 2000s, a lot of people laughed at the idea of Mandarin being taught in schools.

I don't think that's actually true. In fact, I remember in the early 2000s a lot of people were telling students that they should learn Mandarin because it would be easy for them to find a good paying job if they did. For the most part, this seems to have been very poor advice.

For the most part I agree with what you wrote, but I want to add to it. Like others, I disagree with the article. How can you change an entrenched mindset and way of doing things unless you can overthrow them? I strongly feel that mainland Chinese won't be able to consistently innovate (without the crutch of side stepping the Great Firewall to see ) until one major change happens: mainland Chinese need both the freedom and cultural acceptance for rebellion

https://medium.com/@they_made_that/innovations-secret-ingred...

Although I'm slightly biased towards rebellion, I don't buy it. Innovation, as rebellion, happens when there's enough cracks in the model that enough people thinks something else is worthwhile. This usually happens when things are in flux and it's very much what is happening in China today. San Francisco is one of the most free and culturally accepting place in the world with all the world information at your finger tips, yet how many have the time for rebellion in between a six-figure job and massive housing cost?
> happens when there's enough cracks in the model that enough people thinks something else is worthwhile

There's always cracks when you have incumbents resting on their laurels.

> This usually happens when things are in flux and it's very much what is happening in China today.

There are key differences. 1. When you have to worry about what you think, what you say, and what you do; it has a toll on collaboration and creativity, 2. There's a different perception of failure. It's not as well tolerated as it is in the US, which limits experimentation and creativity, and 3. the most important factor: When the group, specifically your family, is more important than the individual; again there's a toll on creativity. ie. why pursue a crazy dream instead of upholding your duty and responsibility to take care of your parents?

> yet how many have the time for rebellion in between a six-figure job and massive housing cost?

Even in ideal conditions there's never that many, just enough; which makes it even worse when the conditions aren't ideal. Why sail a ship to uncharted waters when you can be comfy at home? Can one even think about sailing when you don't have the imagination for the wonderful places you will go?

Really the only hope for innovation that places like China and Singapore have is with their immigration programs ie. Singapore actively encourages it. The only other things I can think of is how well policies are enforced and if the number of people who can circumvent the Great Firewall keeps steadily rising. Places where "the mountains are high and emperor is far away" may be able to produce something awesome one day if the authorities don't immediately interfere with things

Could you tell me what's the biggest innovation of FB? the greatest newsfeed?! using real names in Internet?! Why you can chat with a bot in FB messenger would be a great innovation, but ignore that it already appeared in wechat few years ago and widely used nowday?
> we're not all xenophobic Trump supporters, not even most of us.

Please, leave your virtue-signalling to reddit. We come here for a break from the partisan poo-throwing.

As an aside, the article is about China, which, like much of Asia, isn't that welcoming of outsiders. In even the most die-hard 'conservative' circles, you can become an 'honorary' Texan/American/whatever and be privy to all dealings and goings-on, but it's really, really hard to do the same in China (especially if you're black or white, and doubly so if your mandarin isn't native). You just won't get into many circles.

I leave with this: the US election, to an outsider like myself, is interesting in that many Americans claim any supporters of the other candidate must support their platform 100%. Such an ignorant view. Some people choose Trump for trade, some choose Hillary for a no-surprises, effective office from day 1 (whether or not they see themselves agreeing with the results of her work).

I get a big popup "To keep reading, please enter your email address", any simple way to remove it other than removing nodes from DOM [1] and manually removing "drawbridge-up" CSS class from `<html>`?

[1] using https://addons.mozilla.org/en-US/firefox/addon/hack-the-web/

Firefox's reader view did the trick for me.
Smart, I just inspected the <article> section, set margin-top to -1px, and then just pressed down an arrow key and watched the article scroll while I read. Everyone has their methods of circumventing things like this :)
I'm not getting that for some reason, so I can't test it on this, but if they just ask for an e-mail address then they typically don't do any verification up front, so you can just "register" with pouihasfgdiuh@oijsdfoiujsdf.com to make it go away.
You don't need an add-on for that... just right-click, 'Inspect Element'
Perhaps the reason there's a stigma of China not being able to innovate is because they're so widely known for blatantly copying existing products and designs (and selling them for a much lower price). In some cases, it’s a direct rip-off of an existing product (for example, search AliExpress for “TIAL Wastegate”), and in other cases, it’s a similar, but often cheaper (in both cost and quality) design.

The problem is that people love to generalize, and the fact of the matter is that when many people think of Chinese products, they think of cheap knock-offs being sold on eBay. Obviously, this is a pretty bad generalization considering many of the “legitimate” products we use every day were made in China, but we’re talking about perception amongst the general population. [Criticizes China for making knock-offs while typing on an iPhone…]

The point that needs to be made is that making cheap knock-offs does not preclude them from innovating. There are a lot of people there, and I’m sure the entire country isn’t composed of mindless assembly drones.

It’s a shame that this stigma exists, and it will take a while before it completely fades away.

I realize that some people might be offended by this (and my use of “cheap knock-offs”), but if you don’t believe me, just go ask around for yourself.

While developing, countries like Germany, Japan, the US, etc were accused of copying. Piracy. I suppose like artists learning by copying experts.
That's why German products exported to the United Kingdom had to be marked with "Made in Germany" (roughly 125 years ago).
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How can you innovate if you don't know how stuff are made? Copying is a way of gaining expertise.

You can't build a factory to make computer chips without actually knowing how they are made.

Copying is usually the best strategy to start from behind.

Japanese started the same way. In the 60s and 70s "Made in Japan" meant cheap, low-quality knockoffs. Japanese cars were called rice cups in the 80's. Then they caught up and it took Detroit by surprise.

Ditto for Korea. In the 80/90's they were the cheap Japanese knock offs for tech stuff like TVs etc.
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I've never heard "rice cups". I heard the degeogratory phrase "rice rocket".

That said, it doesn't matter. Japan made decent vechicles, better than Ameriacn vechicle throughout the 80's, even early 80's. Toyota was making sensible vechicles in the 70's. By sensible, I mean simple mechanically, and built to last.

We were so used to inferior Japanese quality, we just assumed 80's Japanese vechicles were built terribly.

They were engineered better that American cars in that decade.

I'll admit I'm a Toyota fan. I bought a 80's Toyota vechicle with a 22r engine that literally has 370,000 miles. In all those miles it needed a new clutch(a DIY job), a few spark plugs, a few fornt break pads, a water pump, and I'm planning on buying an extra alternator. Why, because the original is still putting out 14.5 volts--and it should have died a long time ago.

My fear with Japanese automobile manufacturing is they are going away from what I loved about their vechicles. That is simplicity, and cheap cost of ownership.

Public perception lagged reality, I think today looking back it's clear Japanese cars from the 80's were good quality. I suspect they have generally outlasted domestic models from the same decade.
America's service economy where we "own" IP and everyone sells each other backrubs is a joke.
The problem with innovation in China is the same problem it has in most areas namely corruption. In an actual free market innovation has huge dividends, but when success is arbitrary and often based on outside connections it's far less useful. That's not to say the people are not innovative and there is plenty of innovation in smaller more competitive markets.

In the end they will continue to innovate, but as long as it's fighting both the government and social norms things are going to be bottleneck.

Corruption is an inefficiency of China, but the Chinese market is much larger than the American one. Compare the 1350 million mainland Chinese to the 350 million English speaking north Americans. A Chinese startup has 4x the potential customers. There's a lot of room for inefficiency.

I'm currently in Singapore. Some entrepreneurs here lament the small market size. The population is 5 million. Though it's highly educated and affluent, national and cultural borders set upper bounds on software startups. Creative (of Soundblaster fame) was the last really big Singaporean tech company. Software startups here can't quite compete with big country startups because they don't have the population to grow their user base. Exporting their software means going through translation work, redoing their marketing for a different culture and adapting to new laws. Now when I consider a country in the reverse position like China...

This really depends on what you are selling. China is a huge market for soft drinks and fast food, but BMW really can't care less for people making under 20k/year.

Singapore's total population size is less important to a restaurant than the number of people near your store.

Okay, let's run with your counter argument.

In 2015, BMW sold 463000 cars in China, and 346000 cars in the USA. This was not the first year that China was BMW's largest market.

Last year was the first year that China was the largest market for Mercedes and Porsche. America was the second largest market for both companies.

http://www.best-selling-cars.com/china/2015-full-year-german...

http://www.prnewswire.com/news-releases/bmw-group-us-reports...

America cowboys still live in the American Dream that USA still the only powerhouse of the world. Actually, USA and EU are declining dramatically in the past few years, and will faster in the coming years, considering about the political chaos, racial and religion conflicts, politic correction jokes.
And who's gonna take over? China? Laughable.

Let me know when Xu Jinping's daughter transfers from a US college to the Shanghai Polytechnical Institute. Let me know when the millions of rich Chinese stop parking their cash in San Francisco and Vancouver and instead "invest" in a smoggy Beijing suburb, please! Let me know when China stops destroying its environment and handles its "we-killed-so-many-female-fetuses-we-dont-know-what-to-do-with-these-young-men" problem, which usually means wide-scale unrest and violence.

I'll believe you when the rich and successful Chinese start believing in China. And if the US and EU are so awful, how come everyone still wants to come over here and nobody is clamoring for the cushy, comfortable life-style of a Chinese factory worker ???

1.3x sales with 4x the population proves my point. BMW is a mid+ brand (1 series is 25k) who does not care about total population just population with sufficient income.
That's interesting. It demonstrates my point that a large machine is not to be disregarded just because of its inefficiencies.
Innovating takes time. There is way much less room for things that need more time to happen in China. The operation there is simply stimulated by different direct drivers. Now, with this taken into account, it's probably easier to have a rough idea of the reality.
I was at the Alipay headquarters a few weeks ago. What caught my eye was a large IBM machine kept outside the office with lots of signatures on them. When I asked them what it was, they said this was the last piece of American technology the company used and they'd kept it as a trophy. They've replaced every thing else in the company with Chinese tech. That's quite something for a company which processes millions of transactions in a day.
What operating systems, stacks, languages, compilers, etc do they use?
I think this Chinese guy means machine, instead of tech.
That's probably what he meant. I'm Indian. I didn't go deep into what software etc, so apologies for what might come across as a loose comment. And agree with all of you about much of fundamental software coming from various nations. Can't be of any one country.
Those are pretty hard to assign to a country I'd say. I mean is the Linux kernel Finnish?

But yeah if the point is just to use non-US tech they could run Ubuntu Linux (SA) or OpenBSD (Canada) or I suppose Red Flag Linux (China). Language wise...maybe Python or PHP or Erlang or an ML language?

The kernel has heavy development from the US. If their intention was to think they were running complete on things not developed at least partially in the US, then they were really off the mark. Huawei even blatantly steals software for their network hardware from US companies.

If they just meant the last piece of physical hardware sold by an American headquartered company, then I guess that's something?

Popular FOSS projects are typically invented in the US, funded by US companies, and consists of US developers. I think its a little arrogant to pretend these things would exist without the US.

Also, whats in those Lenovo boxes? Godson chips or American Intels? They are absolutely not running Windows on any desktop then I assume?

The whole thing is laughable. And even then, even if they replace all "American" pieces of software and hardware, the remaining will probably be 80% European anyway! Great Victory, Comrades!
They meant proprietary technologies were replaced by open sources or in-house ones.
That is obviously a ridiculous statement. Just think about it. What is "American tech"? How did they replace all of it? Do they run Linux? NetBSD? Windows? Guess what, that is as much "American" tech as it is "European" or "Canadian" or "Chinese". Do they use sockets and TCP/IP? Or HTTP? Yes? Well guess what, that isn't Chinese tech either! What programming language do they use? Do they use C? Or an OS that was built on C (hint: all of them) Oops. American! Do they use Email? American. Do they run Apache Web Server anywhere? Better not! How about SSL or TLS on that Web Server? OOPS!

I mean it's nothing but a ridiculous circle-jerk that can impress maybe my aunt? How did it impress you?

> The United States wants to believe that the scourge of censorship thwarts online innovation, but China is challenging the idea in ways that frighten and confound.

As an American, I do believe that a culture of censorship and phenomena like the Great Firewall stifle an economy's capacity to innovate. That's not to say that innovation is impossible in such an environment, just more difficult.

> “It doesn’t matter how the car is capable of traveling. Once it gets on the highway, you can imagine what the end result will be,” he said.

> The implication is that China’s government is happy to have companies build shiny, fast things as long as regulators can put up roadblocks as they please. So far, they’ve mostly targeted foreign firms.

Exactly, so far! What happens when the state determines that your blooming startup threatens their agenda?

> “There’s this strange belief that you can’t build a mobile app if you don’t know the truth about what happened in Tiananmen Square,” said Kaiser Kuo, who recently stepped down as head of international communications for Baidu, one of China’s leading tech companies, and hosts Sinica, a popular podcast. “Trouble is, it’s not true.”

There's something that's hilarious, delightful, and depressing about the above statement, all at the same time.

Innovation. I don't think it means what you think it means.

Seriously this is such an over used and hence watered down word. Every new thing isn't and innovation, novel maybe but not innovation.

The assembly line was an innovation. Ride sharing was an innovation. Pokémon go was a novel use of tech.