Bessie Lee, founder of Withinlink, Wayne Xu, president of ZhongAn International, Harry Hui, founding partner of ClearVue Partners, and Lei Chen, CEO of Xunlei, discuss whether China will lead the world in technology.
The talk which took place on the Centre Stage on July 10th starts with the speakers agreeing unanimously that China is indeed leading the world in technology, for the most part. When asked to elaborate, Bessie Lee, founder of Withinlink, replies, “Yes and no, in certain areas China is leading the world, that will be mobile, e-commerce and social, but in other areas like user privacy protection they’re not. Compared to five years ago, protection is already a lot better. Compared to Europe, it’s not there yet.” Wayne Xu, president of ZhongAn International, also states that he would say yes with regard to certain areas, such as the financial and consumer-facing areas.
Harry Hui, whose background is in entertainment, has a slightly different perspective. “I think we’re seeing a lot of exciting innovations coming out of China right now. Even in China’s domestic market, the competition between the local players is fierce and, as a result, they really need to depend a lot on data.” When asked if speed of innovation was an important factor, he states, “I think we should make a distinction between technology and innovation. The US clearly does lead in this regard as far as technological innovation in the digital realm, no questions asked.” However, “in terms of its application, innovation and its iteration and how it applies to the Chinese market, Chinese companies are seeing exponential growth in its adoption purely by the fact it has this large domestic market base, they have access to vast amounts of data and they can react so much quicker.”
Lei Chen highlights that the Chinese Government “has not been a great fan of, say, the most famous technology, which is bitcoin.” Whilst he stands firm in his position that China has a lot of potential to lead in tech, he admits that being late in the game means having a lot of catching up to do. He sees Blockchain as having great potential but finds it hampered by participants who are not responsible with the technology they are handling, which in turn leads to greater regulations. “With any regulation issues, the hardest part is always to tell the good from the bad, especially in new technology like Blockchain.”
The panel’s conversation then turned towards a discussion on what Harry Hui regards as the unique way in which Chinese companies are evolving and adapting, pointing out that, in China, change will tend to be on the incremental side, rather than the radical. He highlights an example, “Many years ago, Haier came out with a washing machine. And they were selling this in Tier 1 cities, and Tier 3 cities. In the Tier 3 cities, they found that the farmers were using it to wash potatoes. It was not designed to wash potatoes. And so, the product developers said, ‘You know, what’s wrong with this?’, And they took it back, and they re-engineered it. They changed the filtering system, and they labelled it and relaunched it and said, “This is good for clothing and potato washing.” Now, a US product manager would have thought differently and the label would say, ‘This is not meant for potato washing’. But that type of ‘Made for China’ local insight is really what’s unique about China.”
Despite the present geopolitical environment, Bessie Lee remains positive. “Give them a couple of years, I think the game will turn,” she states. “I’ve liked what I heard in the other forums, it says Chinese are going to take on the US market but the US are not going to take on the China market like the way that it’s been done.”
Wayne Xu replies by brushing off fears surrounding how China would survive should US technology be cut off or withdrawn, “we should realise that actually, we benefit so much from the openness of the overall technology community and the basic principles of open connection between systems that build the whole world so far.”
Harry Hui takes a more pragmatic approach; “So, I’ll take a different spin on that question because we invest in more non-restricted and non-sensitive sectors like consumption but on the trade war issue, I think it’s a matter of price discovery. If you know that it’s going to be 200 million dollars and it’s going to be 10% tariff, then once I have that certainty, I can predict it and I can start to negotiate and say I’ll take 5 you take 5 or you take 3 and I’ll take 7. Then your pricing consumption and your under write-offs become easier, it’s just getting clarity around it and that’s the issue.”