Of course they do! China has 4x the people. I don't understand these kinds of articles when they dont adjust per capita.
IMO this is the meat of the article:
The U.S. can’t continue to look inward and expect the high
rates of growth we have seen in the tech sector over the
past two decades. Only new, global markets are going to be
the driver of prosperity, and right now, China has its
money where the action is.
Funding is a lagging indicator -- I do expect that Nigeria (population ~190 million) has ~57% of the human potential of the United States (~330 million).
I guess the premise of the parent comment is that China, at least in the tech sector, is considered as "developed" as the US. If that assumption holds true, what the parent comment isn't far off. But that's an assumption that may or may not be true, depending on who you ask at least.
Sure, that's reasonable. I guess my point was there are likely better naive correlates for amount of startup funding than population. Perhaps number of STEM or college educated adults, perhaps levels of general economic growth, perhaps GDP, perhaps levels of business freedom, perhaps population (I'm not ruling it out).
Also Nigeria was a particularly bad example because they're developing spectacularly well, should have picked a large population country with a poor business climate.
I don't think it makes sense to adjust per capita. The biggest startup hubs used to be Silicon Valley, New York, London and Berlin. Germany and the UK might just come out ahead of the US because their startup hubs are in smaller countries than SV.
Chinese real estate prices are SV level already in some cities that are popular with tech. However, they lean more on dense open offices and even converted underground shopping malls. They also tend to put development centers way out in the suburbs away from expensive city centers (well, it depends, for every Lenovo that is almost out to changping, there is a Microsoft in the heart of Zhongguancun).
High office prices only applies to Shenzhen, Beijing, and Shanghai (and maybe GZ and HZ).
As for labor, good programmers and managers are definitely not cheap in China, even if cheaper than SV.
I'd argue its still easier than SV, I'm seeing SV employees move back to China and start their own things due to:
a) The VC funding
b) The overall startup environment
c) Cheaper worker wages
Theres definitely communist red tape but right now tech startups are in vogue unless they directly/indirectly interfere with communist or harmonious society guidelines.
Sure, but wages are not that low anymore (at least for senior talent) while the real estate bubble can mean it costs more to buy a place than in Palo Alto. This is not even getting to education costs if you don’t have hukou. China isn’t that cheap.
Access to VC is nice, but Chinese VCs ar emote conservative than American ones, the business plans that get funded are going to be very different anyways.
Building start-ups in China is great, if you're primarily interested in the China market. Chinese tech companies are overwhelmingly domestic capture entities, they can't get outside the country very easily.
The state now very openly controls all companies in China, directly or indirectly. They dictate what you can do, what you can build, what you can say, what you can sell, where you can sell, what you can do outside of the domestic market, how much capital you can move internationally, when you can move it, who can own your business, how much of your business foreigners can own, etc. You're not allowed to cross their edicts under any circumstances. If you fall out of favor for any reason, at any time, they will destroy you personally.
SV start-ups get the entire rest of the planet as a playground, almost entirely unencumbered by the type of highly restrictive state policies that Chinese tech companies constantly deal with. That's why Baidu was never able to go global and challenge Google. It's why China can never fully go global with most of their social products. They can never compete properly on the international stage with Google, Facebook, Instagram, Amazon, Reddit, Github, Snapchat, Twitter, Salesforce, Workday, Oracle, Windows, iOS, Android, MacOS and countless other types of companies and product categories. It's why WhatsApp & FB captured the world, and WeChat primarily owns China, but does not - and will never - own the rest of the world: aggressive state censorship sucks.
If I want to say that Xi looks like Winnie the Pooh, I can do that on WhatsApp. If I want to make jokes the Communist Party dislikes, I can do that on WhatsApp. If I want to mock Mao, I can do that on WhatsApp (or Reddit, or Twitter, etc). You can't do that in any ecosystem controlled by China (note, those are intentionally non-serious, illustrative examples, China's restrictions are far more smothering and comprehensive).
SV can't get into China. China mostly can't get outside of China. SV wins.
Ya, crowded, usually no seats. Even getting in the station is a PITA with the security checks, it means waiting in line sometimes for greater than the trip takes.
Taxis are cheap, you just need to schedule your commute right.
"How much is an office and a good developer in a big city in China?"
I have worked with good crews in China before. You are looking at 8k USD per month for a solid chinese team member. Anything less than that - you will get into language issues, skill breakdowns or copyright theft. You need to factor in extra project management costs (it is more complex than managing a us based project) and time loss due to timezone delays. Ironically, if you add in the location factors good chinese crews cost about the same as a US based worker.
Unless leaders was a typo and you meant leaders, as much as I disagree with our president, I don't think you can blame him for China overtaking us in VC
It's really just that China is doing an excellent job of developing itself, and they have 4x as many people. Once they reach a reasonable level of development - doesn't even need to be close to the US - of course they will have more VC, and be more powerful
That small region of the US has been, for the last few decades, the global broker of capital and talent working in tech. Silicon Valley is a hub of international activity. The news here is that another place, China, has found ways of brokering the relationship between talent and capital without SV.
Sidenote: The Alipay deal is really more private equity than VC.
This has been absurdly obvious for about 3-5 years now. The knowledge of actual hardware creation & manufacturing has largely migrated to China (hello outsourcing). Costs of living in reasonably stable environments (required for broad innovation) in the US is absurdly high. Government support and funding for innovation - which is required for high value research - has been gutted since the Cold War. These things have a long-term effect.
All of the above are USA policies driven by politics. They can all be 100% fixed with political muscle and will. Much like our infrastructure. We can fix it: we choose not to.
China's government is not stupid; they can watch the US hamstring itself via libertarian policies and work to avoid such approaches. I don't like their approach to human rights, but they are working very hard to fund innovation and infrastructure.
What do you mean by reasonably stable. Suburban Ohio is literally an order of magnitude cheaper than say San Francisco and Cleveland isn't that much more expensive or for that matter unstable.
>Suburban Ohio is literally an order of magnitude cheaper than say San Francisco and Cleveland isn't that much more expensive or for that matter unstable.
Do you know what else is within 300 miles of Cleveland Ohio?
A circular radius of Cleveland is meaningless because half the circle is in Canada. A large portion of that population would be metro Toronto. On top of that the absolute numbers don't matter at all; it's about density.
I grew up in Akron, the former Rubber Capital of the World. There is literally nothing in Northeast Ohio but cornfields, soybeans, brutal winters, and rusting artifacts of the 20th century economy. Columbus could be a good choice for growing tech firms to add a second HQ due to OSU being a pretty decent school, but Cleveland really has nothing going for it. The geographical advantages that led to it's existence and growth during the industrial revolution have gone and will never return.
As pointed out in other comments, there are multiple large cities within a 300 mile radius. Even if there weren't, saying there is "nothing" there dismisses the real lives and businesses that are there.
When did you move? I'm not going to argue that NE Ohio is the best place to live in the country or something, I was speaking very particularly about the region I was familiar with because it sounded like there were very broad statement being made.
You are still speaking a bit too strongly though. There is plenty of things in NEO. For starts world class museums and cultural institutions (having been rich in the past helps).I'm living in San Francisco right now, but I could definitely see myself going back someday
Actually Columbus OH (2 hours from Cleveland) is considered the sweet-spot city, a third of US population lives less than 500 miles away from Columbus, OH.
Stable not the best word, apologies. Life stability was in my mind.
- stable health insurance and medical coverage.
- economy big & stable enough that when one job is lost, another can be found without substantial financial injury.
- geographically dense and large network of innovative people (this requires a good university - or two).
Essentially you need a place where you can take risks and fail without causing a total life crisis. that is why SV started as a thing: fruit farms with cheap land. Universities were nearby and the Cold War was in full force: a lot of funding was present. The interaction of knowledgeable people is a huge support base for increased research and innovation.
> they can watch the US hamstring itself via libertarian policies
The size of the US federal budget has only gone in one direction regardless of which party was in power, and it hasn't been to get smaller. And they keep passing anti-startup garbage like FOSTA or the incredible bureaucracy that de facto prohibits small businesses from participating in the finance or medical industries. These are not libertarian policies.
The problem is they're spending trillions on unnecessary wars and buying the elderly vote with outrageously expensive program expansions, and then there is nothing left -- less than nothing, since it's all debt-financed -- to fund the actually-beneficial (and much less expensive) programs that you're asking for.
> The size of the US federal budget has only gone in one direction regardless of which party was in power, and it hasn't been to get smaller. And they keep passing anti-startup garbage like FOSTA or the incredible bureaucracy that de facto prohibits small businesses from participating in the finance or medical industries. These are not libertarian policies.
Yup, all correct. I say this with the slight bias of a dual national, but if you want a glimpse into the future that current US policy gets you, look at Italy. And then keep in mind that Italy still provides education and healthcare.
EDIT: Not sure why I'm getting downvoted. I didn't make this comment to be inflammatory, moreso to point out that our policy promotes wealth concentration and erodes middle class opportunities. I'm not suggesting that libertarian policies are a solution, nor that the US has adopted them. Just saying that the Italian regulatory environment favors incumbents and that my take is that we're headed in that direction as well via corporate capture. Italy's not a disaster - it's still the 9th largest economy in the world - but it certainly doesn't live up to its potential following its post-war boom.
The Iraq war had significant buy-in from (some now mainstream) libertarian writers and thinkers. For example, Megan McArdle, under the name "Jane Galt", wrote feverishly in favor of the war on terror and mocked those who opposed it. The libertarian argument was that by toppling dictatorships and theocracies, these "liberated" middle-eastern democracies would all have liberalized economies.
I don't want to single out libertarians here though, I just want to point out interventionist policies have widespread support in the United States across the political spectrum (after all "even the liberal New Republic" supported it) and I don't see that trend reversing any time soon.
So you're saying many libertarians got caught up in the Neo-Con fervor of the early 2000s.
I don't think anyone will disagree. Trends are trends. Those who booed Ron Paul in 2008 started agreeing that Iraq was a mistake in 2016. https://www.youtube.com/watch?v=7v8qtZ3I5AM
> The Iraq war had significant buy-in from (some now mainstream) libertarian writers and thinkers.
Identifying someone who claims to support an idea and then makes an argument inconsistent with that idea is a valid criticism of the person and their bad argument, not of the original idea.
> I don't want to single out libertarians here though, I just want to point out interventionist policies have widespread support in the United States across the political spectrum (after all "even the liberal New Republic" supported it)
Sure, right after 9/11 when everybody was angry. Angry makes for irrational. Maybe it's time to revisit a lot of that stuff and roll it back.
> and I don't see that trend reversing any time soon.
The public is made up of people. Things change when somebody changes them.
That was the motto of one jerk who nobody likes, who incidentally runs a multi-billion dollar company and not a small business, whose company has since disavowed it, and is in general not how small businesses actually operate.
You don't want doctors to "move fast and break things" but you also don't want them to spend 95% of their time filling out paperwork so that medicine becomes so expensive that people go untreated because they can't afford it, or it bankrupts the government.
You don't want Nazi experiments but you do want a cure for cancer. There is a trade off here. If you choose wrong people die, no matter which wrong you choose. Which is why the correct solution has more to do with informed consent and less to do with massive regulatory burdens that exclude small entities, increase costs and deter participation.
China is an interesting case because many of the startups are directly backed by government interests. This is also true for SV but not to the extent that it is in China. Most SV firms are backed by private capital with a few notable exceptions (In-Q-Tel).
It's not really an apples to apples comparison. Massive government funding is providing huge amounts of capital to make this happen and there is speculation on bubbles forming by cheap credit with few strings attached.
This is not true. In fact, most of the startups are avoiding government interested related projects because China government can easily shutdown or take control of your startups for FREE.
That's why there is no SpaceX or anything that can used in weapon area.
The Total Addressable Market is huge in any developing country. The only problem was that the previously internet penetration was very low and not many people had computers to get online. Cheaper and more mature smartphones has changed all that. Now with the huge and growing "online" population it is not surprising that this is happening.
But, I must add that China's notorious protectionism is also playing it's part. No international company can take money from Silicon VC and then pump it in China to build their brand. Uber tried and failed. This is in complete contrast to India. If you look at it ecom saw bigger and bigger deals for Flipkart until Amazon happened. Same with Uber holding it's ground against Ola. I am sure if India had similar protectionism, we might have seen similar headlines for them too, maybe not at the same time but couple of years give or take.
There are several factors at work here. First, China is extremely protectionist. A lot of the Chinese tech companies are reimplementations of American companies where they get to learn from history and their counterpart's IP. This means that even if China was not developing any new products or technologies, they would still be spending a huge amount of money to replicate the US tech companies. Supposedly economists should be lambasting this wasteful protectionism, but that kind of negativity isn't commonly applied to China yet.
Secondly, American companies have received enormous pushback when they do attempt expansion overseas. Some of this pushback is valid, and some is not. But often American companies are hit hard for stupid reasons because they don't have the political cover that Chinese companies ostensibly possess.
Which leads to the next point which is that Tencent, Alibaba and Baidu (which are the biggest Chinese tech players) are effectively government sponsored entities. Baidu especially was created after the Chinese government ran Google out of the country. This gives them much more political firepower when working out deals with other countries.
American anti-corruption laws are some of the strongest in the world, which is a good thing, but this does mean that American companies are operating at a big disadvantage when working in countries and industries where bribery is practically required. Russia, Brazil and Mexico are often problem countries for example. To get away with the backroom shenanigans required for dealing in those countries, you need the kind of political clout that companies like Exxon possess, and nobody in the tech industry wields that kind of power.
American companies operate under a number of "disadvantages." Some of these are disadvantages are good and some are not, but it does mean Chinese tech companies have much wider latitude to act and have much closer access to the political levers of their country. The biggest question here (as always with China) is how much do metrics that are developed for a free market actually matter when applied to a country that is not a free market but is pretending to be one when it suits their needs. The west faced a similar problem with the USSR during the cold war. The only news the west had access to was news that made the USSR look good, so we were constantly panicking at how powerful the Soviet Union seemed to be while they ineptly blundered from one error to another.
We[0] are currently raising Series A and are based in China. Notes from our experience to date:
(1) Very few VCs here speak fluent English. I have had to pitch in Mandarin many times, even to partners at local branches of leading international firms.
(2) Many mainland VC firms now run USD denominated funds, some are explicitly looking out of China, especially to Southeast Asia.
(3) A great place to be for VC next week is RISE in Hong Kong, http://riseconf.com/ ... please reach out with an email if you are attending.
(4) Many companies here seem open to partnership deals. I suspect that non-equity sources of funding may have a greater influence here than elsewhere.
(5) An environment of extreme capital availability combined with a huge largely homogeneously regulated market definitely affects business model and growth strategy. It would be interesting to see aggregate research in this space.
70 comments
[ 21.7 ms ] story [ 2353 ms ] threadIMO this is the meat of the article:
Also Nigeria was a particularly bad example because they're developing spectacularly well, should have picked a large population country with a poor business climate.
By the way, we are looking for a money receiver. Please inquire!
https://www.bloomberg.com/view/articles/2015-10-13/it-isn-t-...
Lesson learned: Sometimes a little bit Racism is healthy. No kidding!
High office prices only applies to Shenzhen, Beijing, and Shanghai (and maybe GZ and HZ).
As for labor, good programmers and managers are definitely not cheap in China, even if cheaper than SV.
a) The VC funding b) The overall startup environment c) Cheaper worker wages
Theres definitely communist red tape but right now tech startups are in vogue unless they directly/indirectly interfere with communist or harmonious society guidelines.
Access to VC is nice, but Chinese VCs ar emote conservative than American ones, the business plans that get funded are going to be very different anyways.
The state now very openly controls all companies in China, directly or indirectly. They dictate what you can do, what you can build, what you can say, what you can sell, where you can sell, what you can do outside of the domestic market, how much capital you can move internationally, when you can move it, who can own your business, how much of your business foreigners can own, etc. You're not allowed to cross their edicts under any circumstances. If you fall out of favor for any reason, at any time, they will destroy you personally.
SV start-ups get the entire rest of the planet as a playground, almost entirely unencumbered by the type of highly restrictive state policies that Chinese tech companies constantly deal with. That's why Baidu was never able to go global and challenge Google. It's why China can never fully go global with most of their social products. They can never compete properly on the international stage with Google, Facebook, Instagram, Amazon, Reddit, Github, Snapchat, Twitter, Salesforce, Workday, Oracle, Windows, iOS, Android, MacOS and countless other types of companies and product categories. It's why WhatsApp & FB captured the world, and WeChat primarily owns China, but does not - and will never - own the rest of the world: aggressive state censorship sucks.
If I want to say that Xi looks like Winnie the Pooh, I can do that on WhatsApp. If I want to make jokes the Communist Party dislikes, I can do that on WhatsApp. If I want to mock Mao, I can do that on WhatsApp (or Reddit, or Twitter, etc). You can't do that in any ecosystem controlled by China (note, those are intentionally non-serious, illustrative examples, China's restrictions are far more smothering and comprehensive).
SV can't get into China. China mostly can't get outside of China. SV wins.
Taxis are cheap, you just need to schedule your commute right.
I have worked with good crews in China before. You are looking at 8k USD per month for a solid chinese team member. Anything less than that - you will get into language issues, skill breakdowns or copyright theft. You need to factor in extra project management costs (it is more complex than managing a us based project) and time loss due to timezone delays. Ironically, if you add in the location factors good chinese crews cost about the same as a US based worker.
Honestly, why is this news?
https://news.crunchbase.com/news/in-q2-2018-global-vc-scales...
Now, we are at the tipping point where China is looking more and more like the world most powerful country.
It's really just that China is doing an excellent job of developing itself, and they have 4x as many people. Once they reach a reasonable level of development - doesn't even need to be close to the US - of course they will have more VC, and be more powerful
Also, you can only buy something if somebody has the will to sell it.
>>China is driving ahead of Silicon Valley and the rest of the United States on venture capital dollars invested into startups
Sidenote: The Alipay deal is really more private equity than VC.
This has been absurdly obvious for about 3-5 years now. The knowledge of actual hardware creation & manufacturing has largely migrated to China (hello outsourcing). Costs of living in reasonably stable environments (required for broad innovation) in the US is absurdly high. Government support and funding for innovation - which is required for high value research - has been gutted since the Cold War. These things have a long-term effect.
All of the above are USA policies driven by politics. They can all be 100% fixed with political muscle and will. Much like our infrastructure. We can fix it: we choose not to.
China's government is not stupid; they can watch the US hamstring itself via libertarian policies and work to avoid such approaches. I don't like their approach to human rights, but they are working very hard to fund innovation and infrastructure.
Do you know what else is within 300 miles of Cleveland Ohio?
Absolutely nothing.
All of these are about 400 miles away, some less than 300.
And did you edit your comment, because I think it originally said 500 miles.
~50 million people live within 300 miles of Cleveland vs about ~16 million within 300 miles of SF.
https://www.freemaptools.com/find-population.htm
I grew up in Akron, the former Rubber Capital of the World. There is literally nothing in Northeast Ohio but cornfields, soybeans, brutal winters, and rusting artifacts of the 20th century economy. Columbus could be a good choice for growing tech firms to add a second HQ due to OSU being a pretty decent school, but Cleveland really has nothing going for it. The geographical advantages that led to it's existence and growth during the industrial revolution have gone and will never return.
You are still speaking a bit too strongly though. There is plenty of things in NEO. For starts world class museums and cultural institutions (having been rich in the past helps).I'm living in San Francisco right now, but I could definitely see myself going back someday
http://aqicn.org/map/northamerica/
And compare to:
http://aqicn.org/map/china/
- stable health insurance and medical coverage.
- economy big & stable enough that when one job is lost, another can be found without substantial financial injury.
- geographically dense and large network of innovative people (this requires a good university - or two).
Essentially you need a place where you can take risks and fail without causing a total life crisis. that is why SV started as a thing: fruit farms with cheap land. Universities were nearby and the Cold War was in full force: a lot of funding was present. The interaction of knowledgeable people is a huge support base for increased research and innovation.
The size of the US federal budget has only gone in one direction regardless of which party was in power, and it hasn't been to get smaller. And they keep passing anti-startup garbage like FOSTA or the incredible bureaucracy that de facto prohibits small businesses from participating in the finance or medical industries. These are not libertarian policies.
The problem is they're spending trillions on unnecessary wars and buying the elderly vote with outrageously expensive program expansions, and then there is nothing left -- less than nothing, since it's all debt-financed -- to fund the actually-beneficial (and much less expensive) programs that you're asking for.
Yup, all correct. I say this with the slight bias of a dual national, but if you want a glimpse into the future that current US policy gets you, look at Italy. And then keep in mind that Italy still provides education and healthcare.
EDIT: Not sure why I'm getting downvoted. I didn't make this comment to be inflammatory, moreso to point out that our policy promotes wealth concentration and erodes middle class opportunities. I'm not suggesting that libertarian policies are a solution, nor that the US has adopted them. Just saying that the Italian regulatory environment favors incumbents and that my take is that we're headed in that direction as well via corporate capture. Italy's not a disaster - it's still the 9th largest economy in the world - but it certainly doesn't live up to its potential following its post-war boom.
The Iraq war had significant buy-in from (some now mainstream) libertarian writers and thinkers. For example, Megan McArdle, under the name "Jane Galt", wrote feverishly in favor of the war on terror and mocked those who opposed it. The libertarian argument was that by toppling dictatorships and theocracies, these "liberated" middle-eastern democracies would all have liberalized economies.
I don't want to single out libertarians here though, I just want to point out interventionist policies have widespread support in the United States across the political spectrum (after all "even the liberal New Republic" supported it) and I don't see that trend reversing any time soon.
I don't think anyone will disagree. Trends are trends. Those who booed Ron Paul in 2008 started agreeing that Iraq was a mistake in 2016. https://www.youtube.com/watch?v=7v8qtZ3I5AM
Identifying someone who claims to support an idea and then makes an argument inconsistent with that idea is a valid criticism of the person and their bad argument, not of the original idea.
> I don't want to single out libertarians here though, I just want to point out interventionist policies have widespread support in the United States across the political spectrum (after all "even the liberal New Republic" supported it)
Sure, right after 9/11 when everybody was angry. Angry makes for irrational. Maybe it's time to revisit a lot of that stuff and roll it back.
> and I don't see that trend reversing any time soon.
The public is made up of people. Things change when somebody changes them.
This is a good thing. These areas are not places where you want to "move fast and break things."
Nobody wants anybody to "move fast and break things":
https://xkcd.com/1428/
That was the motto of one jerk who nobody likes, who incidentally runs a multi-billion dollar company and not a small business, whose company has since disavowed it, and is in general not how small businesses actually operate.
You don't want doctors to "move fast and break things" but you also don't want them to spend 95% of their time filling out paperwork so that medicine becomes so expensive that people go untreated because they can't afford it, or it bankrupts the government.
You don't want Nazi experiments but you do want a cure for cancer. There is a trade off here. If you choose wrong people die, no matter which wrong you choose. Which is why the correct solution has more to do with informed consent and less to do with massive regulatory burdens that exclude small entities, increase costs and deter participation.
It's not really an apples to apples comparison. Massive government funding is providing huge amounts of capital to make this happen and there is speculation on bubbles forming by cheap credit with few strings attached.
Links:
http://www.chinadaily.com.cn/business/2017-07/28/content_302...
https://news.crunchbase.com/news/one-china-based-vc-backed-g...
https://www.wsj.com/articles/chinas-tech-startup-funding-the...
That's why there is no SpaceX or anything that can used in weapon area.
But, I must add that China's notorious protectionism is also playing it's part. No international company can take money from Silicon VC and then pump it in China to build their brand. Uber tried and failed. This is in complete contrast to India. If you look at it ecom saw bigger and bigger deals for Flipkart until Amazon happened. Same with Uber holding it's ground against Ola. I am sure if India had similar protectionism, we might have seen similar headlines for them too, maybe not at the same time but couple of years give or take.
Secondly, American companies have received enormous pushback when they do attempt expansion overseas. Some of this pushback is valid, and some is not. But often American companies are hit hard for stupid reasons because they don't have the political cover that Chinese companies ostensibly possess.
Which leads to the next point which is that Tencent, Alibaba and Baidu (which are the biggest Chinese tech players) are effectively government sponsored entities. Baidu especially was created after the Chinese government ran Google out of the country. This gives them much more political firepower when working out deals with other countries.
American anti-corruption laws are some of the strongest in the world, which is a good thing, but this does mean that American companies are operating at a big disadvantage when working in countries and industries where bribery is practically required. Russia, Brazil and Mexico are often problem countries for example. To get away with the backroom shenanigans required for dealing in those countries, you need the kind of political clout that companies like Exxon possess, and nobody in the tech industry wields that kind of power.
American companies operate under a number of "disadvantages." Some of these are disadvantages are good and some are not, but it does mean Chinese tech companies have much wider latitude to act and have much closer access to the political levers of their country. The biggest question here (as always with China) is how much do metrics that are developed for a free market actually matter when applied to a country that is not a free market but is pretending to be one when it suits their needs. The west faced a similar problem with the USSR during the cold war. The only news the west had access to was news that made the USSR look good, so we were constantly panicking at how powerful the Soviet Union seemed to be while they ineptly blundered from one error to another.
(1) Very few VCs here speak fluent English. I have had to pitch in Mandarin many times, even to partners at local branches of leading international firms.
(2) Many mainland VC firms now run USD denominated funds, some are explicitly looking out of China, especially to Southeast Asia.
(3) A great place to be for VC next week is RISE in Hong Kong, http://riseconf.com/ ... please reach out with an email if you are attending.
(4) Many companies here seem open to partnership deals. I suspect that non-equity sources of funding may have a greater influence here than elsewhere.
(5) An environment of extreme capital availability combined with a huge largely homogeneously regulated market definitely affects business model and growth strategy. It would be interesting to see aggregate research in this space.
[0] http://infinite-food.com