Zhongguancun, known as the “Silicon Valley of China,” has become the cradle of China’s flourishing technology industry. Xiaomi Corp., China’s largest smartphone retailer, was born here, as well as the internet giant Alibaba, which just completed the largest IPO in history. However, Beijing isn’t the only city in China where the tech culture is thriving. In Shenzhen, a southern city 1,350 miles away from Beijing, the internet service provider Tencent is developing into China’s largest internet company, with a market value of $206 billion.
The biggest threat to the American technology companies will be “imitators” like Tencent, which are actually more like homegrown Silicon Valley innovators.
In the U.S., a new company in rapid expansion would likely be acquired by giants like Facebook and Google or driven into bankruptcy. But due to its relatively isolated market environment, Tencent has become the world’s fifth-largest listed internet company without so much threats. As Chinese large enterprises have enormous resources at their disposal, it may no longer matter whether their initial success was based on innovation or imitation—the only thing that matters is whether they can spend money wisely or not.
Chinese products are far more innovative than the westerners think. Executives at Tencent acknowledged that they prefer “small and swift innovations” to ambitious long-term projects that Apple Watch or Google Chrome will launch. But it would be a big mistake to think it as an evidence of lacking creativity. Mr. Ma Rui, a venture capitalist, recently pointed out in an article on TNW that Tencent’s WeChat app actually includes many clever, original functions specially tailored for Chinese users.
中国的产品远比西方人认为的更具创新性。腾讯的高管们坦诚表示，与Apple Watch 或谷歌Chrome浏览器这类颇具雄心的长期项目相比，他们更加青睐于“小而快捷的创新”。但若说这样做是缺乏创造力的表现那就大错特错了。风险投资人马睿最近在TNW上发表的一篇文章中指出，腾讯的微信应用实际上包含了很多专为中国用户设计的巧妙、原创的功能。
Companies like Tencent and its competitor Alibaba have abundant capitals and unbreakable status in China,so they can invest aggressively in overseas business with long-term development. Recently, Alibaba and Tencent have established their venture branches in America. On the international market, Tencent also performs well in the Southeast Asian market. It acquired 28% stake of South Korean CJ Games at $500 million to expand its mobile gaming business. In such a stunning speed, it’s only a matter of time for the Chinese invested apps going viral, even those non-Chinese-developed apps.
Overall, Chinese technology culture is flourishing. Involving a tech startup is considered “perfectly charming” in China, just like it was in the U.S. in the late 90’s. Top schools like Peking University have set up entrepreneurial courses from elite universities like Stanford Business School, while over 1,000 Chinese organizations have invested more than $56 billion in domestic startups.
Government regulations in China indeed make founding a new company difficult. It takes 38 days in China to set up a company, while only 5.7 days in other countries. However, the Chinese government has recently started to encourage startups, and therefore it might get better. Public funding for high-tech R&D has risen rapidly in China in recent years, as Chinese officials begin to admit publicly the importance of entrepreneurship. As the development goes deeper, the advantages of starting a high-tech company in Silicon Valley instead of Shenzhen might not last long.