Home / SmartTech / With China tariffs delayed, Beijing faces startup dilemma – TechCrunch

With China tariffs delayed, Beijing faces startup dilemma – TechCrunch

China is facing A challenging juxtaposition in the coming years: "The government remains in control of business and media while opening up the country to the knowledge economy"

China has lifted up more humans in a shorter period of time than any other country in the history of the planet. That mesmerizing growth engine, though, is starting to face an intense slog.

The future (of course) is the buzzwords that linger in Silicon Valley coffee shops: innovation, startups, and entrepreneurship, mixed with some Chinese flavors like indigenous technology development. China has become the world leader in semiconductors and artificial intelligence. To get there though, it needs to create the intellectual environment to push the frontiers of science and technology.

That's right. On one side, New York Times' Asia business columnist Li Yuan from this weekend. China's already narrow internet.

Few are predicting a crash, but worries about China's long-term prospects are growing. Pessimism is so high, in fact, that some businesspeople are comparing China's potential future to another country.

Only one-third of China's rich people say they are very confident in the country's economic prospects, according to a recent survey of 465 wealthy individuals by Hurun, a Shanghai-based research firm. Two years ago, almost two-thirds said they were very confident. 201

8. Nearly half said they were considering migrating to a foreign country or had already started the process.

Minxin Pei, a well-known writer on China's business environment and politics, which is quoted by Yuan as saying:

"It's clear to the private businesspeople that the government does not need them, it'll slaughter them like pigs. This is not a government that respects the law. It can change on a dime. "

China's government furiously denied the article's contention, arguing in its internationally-focused mouthpiece that:

Because some Western media's always tend to smear or even subvert China's political system. Take Chen Tianyong's story , With ulterior motives, the New York Times tells stories of certain Chinese people and then exaggerates the fact, thus declaring that there are serious problems in China's economy and political system into the Western media's trap.

(Really, it's fun to read the Global Times in the Morning, New York City subway at 8:15 am on Monday morning is fun).

Yet, for all the entrepreneurs supposedly leaving, business opportunities remain robust. China's government is announcing a major economic development plan to create a "Greater Bay Area" region around Guangdong, Hong Kong, Macau and others to compete directly with California's Bay Area (The Lesser Bay Area: Even Better Without High-Speed ​​Rail! ™). The goal is to build upon the region's manufacturing process and increasingly turn it into a source for technology innovation. If the blueprint's economic goals are achieved, the region would rival the United Kingdom in economic size.

But that's a big "if."

Few areas of the economy show the tension between openness and control better than the video game industry. China has once again stopped accepting licenses for games in the country last week, following a letter session of approvals following last year's nine-month long hiatus. Tencent, which produces some of the country's most popular games, has lost nearly a quarter of its value in the meantime, even while it puts new streaming rules into effect.

China has incredible potential to lead in technology (and frankly beat the united states) if it can figure out how to open its economy, perhaps not to foreign competition, but at least to its own talent. Yuan quotes several entrepreneurs saying that Trump's trade was with China may be the country's last hope for a more open environment. Trump's delay implementing tariffs on China this weekend, though, highlights the danger of relying on external forces to push domestic change. Only the Chinese can rebuild China's economy.

Across the strait, Taiwan's Silicon Valley is fizzling

Photo by keel via Getty Images

Becoming the next Silicon Valley is every government's dream pieces together to make it happen. Take Taiwan, which has been adopted as an attempt to survive in the penumbra of China's overwhelming economy.

It's Silicon Valley plans are fizzling out of action and a stagnant economy according to the Taiwan Gazette:

"Although [the government was] targeted to issue 2200 visas, the plan is hampered by cumbersome business regulations and restrictive visas and work permits so far has disbursed a mere two, "said Jason Hsu, a KMT legislator with experience in Taiwan's innovation sector.

Hsu said the government has not succeeded in attracting any global entrepreneurs to the island since the plan was implemented.

Compounding Taiwan's global talent crunch is out of China and the United States

You can not build an innovative economy if the talent can not or will not show up.

US slowing H-1B visas

Creative Commons

Meanwhile, the United States has plenty of talent to do the country.

We previously talked about how the trump administration attempts to simplify some elements of the H-1B process. Now, USCIS has announced a decline in the approval rate for H-1B visa applications. In 4Q18 only 75% of H1-B applications were approved, compared to 83% and 92% in 2017 and 2016 respectively.

The application process itself has gotten more intensive, with reviewing agencies requesting additional evidence from approximately 60% of Corporate applicants in the fourth quarter of 2018, compared to 46% and 28% in 2017 and 2016, respectively. The Wall Street Journal noted that Apple, Microsoft and others had a 99% approval rate, while Capgemini was much lower at 60%.

The Wages of American workers is a fair compromise. More transparency here would be very helpful. But if the United States wants to maintain its technological edge, it needs smart and talented workers to congregate here.

Photo via Intel Corporation

Written by Arman Tabatabai

At a press event last week, Intel's newly appointed CEO Bob Swan reiterated the company's strategy of investing heavily in growth markets outside its core competencies.

Intel invested nearly $ 30 billion last year in R & D with focus on memory, 5G, and graphical processing units (GPUs), which are best option for artificial intelligence, machine learning, and any case of needing strong parallelized processing capabilities. The FT quoted Swan as saying:

… "If we want to play in a much larger market we're going to continue to invest more in R & D, there's no question about that," he said.

Traditional brand names chipmakers have lost dominance share by investing heavily in whatever driving profits at the time, while ignoring emerging tech that has become the primary source of growth.

Photo by MONEY SHARMA / AFP / Getty Images

Written by Arman Tabatabai [19659002] India is facing a similar dilemma to China. "

India's government policies are being drafted for business, social, and messaging companies. Following the country's heightened focus on data localization, which requires the Internet to be used in the future, the Internet has become increasingly complex

At the same time, the government is providing access to information and services social networking and messaging platforms to swiftly remove content deemed "unlawful" or threatening to the "sovereignty and integrity of India."

While the Indian government is trying to take a hard-line approach to avoiding the misconduct that has followed the expansion of big tech, they're putting more pressure on companies that face a tougher, more expensive ope India's "national champion" policy

As India continues to move towards a policy that is difficult to compete with, a Chinese-style closed and censored Internet is likely ill-likely.


  • Little Brown & Co just released a retrospective from Netflix's co-founder and original CEO, Marc Randolph, coming up with this fall and titled "That Will Never Work: The Birth of Netflix and the Amazing." Life of an Idea. "
  • Billonnaire Raj by James Crabtree, The Next Factory of the World by Irene Yuan Sun, and The Next Billion Users by Payal Arora.
  • More discussion of megaprojects, infrastructure, and "why can not we build things"


To every member of Extra Crunch: thank you. You allow us to get off the ad-load media churn conveyor belt and spend quality time on amazing ideas, people, and companies. If you have any questions, please send an email to danny@techcrunch.com.

This newsletter is written with the assistance of Arman Tabatabai of New York

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