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VC from Asia is skyrocketing

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Re: VC from Asia is skyrocketing

#31

Post by abhinavkulkarni »

abhiminator wrote: post #9

I remember The Economist doing a piece on this fairly recently[0] that talked exclusively about how China's tech VCs and established corporations (referring to the likes of Alibaba/Tencent) are challenging (and to a certain extent dethroning) Silicon Valley "monopoly" when it comes to investing in innovation/R&D in super critical areas like A.I., for example. One huge advantage Chinese corporations and startups have…

I think we need to be careful about attributing all of the China's success and splurge of VC funding to IP theft, hostile domestic market for foreign players, etc. China is succeeding because it really wants to.

With manufacturing in US hollowed out in last couple of decades and China being the new global manufacturing powerhouse, it is not surprising that China is seeking smart (software/cloud/AI/robotics powered) solutions to industrialization, warehousing, transportation, supply chain, payments and other areas. Why hasn't US achieved the level of digital payment smoothness that China has been able to?

While the points you made about lax laws and blatant data privacy invasion are an contributing factors, I think you would have seen China making great strides in the above mentioned areas even if laws were enforced strictly. It's important to recognize China's technological prowess. They have similarly taken a lead in bioengineering.

Re: VC from Asia is skyrocketing

#32

Post by seanmcdirmid »

abhiminator wrote: post #20
seanmcdirmid wrote: post #15

Earlier quoted context omitted.

Laws in China are not as relevant as enforcement. Enforcement is completely contextual, if they don’t like what you are doing they’ll get you on something, so as a foreign company you have to tread much more carefully when operating in China than a Chinese company. The legal framework in China simply isn’t very developed, that doesn’t mean you can get away with whatever you want, quite the contrary, it means you neve…

> quite the contrary, it means you never know when the government will come down on you for violating some unwritten rule. Isn't bribing your way out of "violations" common in China?

Not really. You at least have to build up your guanxi before the violations occur (or brought up as a problem), once it happens, it’s too late. At anyrate, the FCPA has to be followed by American citizens as well as companies (other western companies have similar acts), so it isn’t really an option.

My point is, unless you are Chinese working for a Chinese company, don’t try to be edgy in China, follow both written and unwritten rules. Foreigners are great chickens to kill to scare the monkeys, as the Chinese idiom goes.

Re: VC from Asia is skyrocketing

#34

Post by jorblumesea »

VC is China is complex, where many VC investment firms are just arms of the Chinese government. I don't think it's fair to compare our VC system to theirs. While the US does some VC investment (In-Q-Tel) they are far more separated.

Re: VC from Asia is skyrocketing

#35

Post by Chaebixi »

abhinavkulkarni wrote: post #31
abhiminator wrote: post #9

I remember The Economist doing a piece on this fairly recently[0] that talked exclusively about how China's tech VCs and established corporations (referring to the likes of Alibaba/Tencent) are challenging (and to a certain extent dethroning) Silicon Valley "monopoly" when it comes to investing in innovation/R&D in super critical areas like A.I., for example. One huge advantage Chinese corporations and startups have…

I think we need to be careful about attributing all of the China's success and splurge of VC funding to IP theft, hostile domestic market for foreign players, etc. China is succeeding because it really wants to. With manufacturing in US hollowed out in last couple of decades and China being the new global manufacturing powerhouse, it is not surprising that China is seeking smart (software/cloud/AI/robotics powered) s…

> Why hasn't US achieved the level of digital payment smoothness that China has been able to?

Because it already achieved that "level of digital payment smoothness" with credit cards?

> I think we need to be careful about attributing all of the China's success and splurge of VC funding to IP theft, hostile domestic market for foreign players, etc. China is succeeding because it really wants to.

> It's important to recognize China's technological prowess. They have similarly taken a lead in bioengineering.

I attribute it to having an authoritarian government that's not afraid to direct the economy. The US, on the other hand, has more-or-less adopted an ideology that specifically rejects that kind of government economic direction.

Re: VC from Asia is skyrocketing

#36

Post by aaavl2821 »

Chaebixi wrote: post #19
abhiminator wrote: post #9

I remember The Economist doing a piece on this fairly recently[0] that talked exclusively about how China's tech VCs and established corporations (referring to the likes of Alibaba/Tencent) are challenging (and to a certain extent dethroning) Silicon Valley "monopoly" when it comes to investing in innovation/R&D in super critical areas like A.I., for example. One huge advantage Chinese corporations and startups have…

> China's tech VCs and established corporations (referring to the likes of Alibaba/Tencent) are challenging (and to a certain extent dethroning) Silicon Valley "monopoly" when it comes to investing in innovation/R&D in super critical areas like A.I., for example. Isn't this also official Chinese government policy? Those Chinese tech VCs may be literally funded by the state and/or operating under its direction.

Apparently there is almost $800B (7% of China's gdp) in Chinese government money in "venture guidance funds", basically government LPs. Originally the govt wanted to do direct venture investments but that proved challenging and strewn with conflicts

The article mentions that the govt funding may not be as large as it seems and that the government LPs don't have that much control over investment strategy, but the intent is there

https://www.chinamoneynetwork.com/2017/10/31/chinas-798b-gov...

Re: VC from Asia is skyrocketing

#38

Post by coldtea »

abhinavkulkarni wrote: post #31
abhiminator wrote: post #9

I remember The Economist doing a piece on this fairly recently[0] that talked exclusively about how China's tech VCs and established corporations (referring to the likes of Alibaba/Tencent) are challenging (and to a certain extent dethroning) Silicon Valley "monopoly" when it comes to investing in innovation/R&D in super critical areas like A.I., for example. One huge advantage Chinese corporations and startups have…

I think we need to be careful about attributing all of the China's success and splurge of VC funding to IP theft, hostile domestic market for foreign players, etc. China is succeeding because it really wants to. With manufacturing in US hollowed out in last couple of decades and China being the new global manufacturing powerhouse, it is not surprising that China is seeking smart (software/cloud/AI/robotics powered) s…

>I think we need to be careful about attributing all of the China's success and splurge of VC funding to IP theft, hostile domestic market for foreign players, etc

What, and not be racist? Where's the fun in that?

It's clear that Chinese scientists and engineers are inferior (except when they happen to immigrate and work in the US, then they're suddenly OK) /s

Re: VC from Asia is skyrocketing

#39

Post by Chaebixi »

cwperkins wrote: post #7

I think it's always strange that the media frames this as "threatening" to shift power. On the one hand I agree that I would like to keep America investing in R&D to create the next great innovation that revolutionizes the world, on the other hand I do not fear other countries of the world overtaking us. I frankly think it's awesome to see other countries of the world investing and leapfrogging off of American innova…

> I think it's always strange that the media frames this as "threatening" to shift power.

> ...on the other hand I do not fear other countries of the world overtaking us.

What if those counties are authoritarian and explicitly reject Western, liberal values?

Re: VC from Asia is skyrocketing

#40

Post by karthikb »

pkaye wrote: post #26
karthikb wrote: post #14

Earlier quoted context omitted.

Don't forget - a US immigration system that makes it incredibly difficult, expensive, and time consuming for individuals from China (and India, which is following the same VC trends as China, just time shifted) to come and settle in the US. Increasingly, money that would have flowed to US VCs can just stay "at home" and invest in talent that is increasingly staying.

What about the EB-5 visa?

Not going to work for most founders. The point is that VC money chases where founders and their talent are, which is why the SF Bay Area has had such as stronghold for such a long time. As the US makes it more difficult for founders and talent to come to the US, VCs will focus on areas where those founders actually are. And if your option is - stay in your home country and take local money, or try to move to the US, maybe having to figure out all sorts of loopholes to speedup the process and still spend years doing so...which do you pick?

Combine this with major new technologies on the horizon (especially around autonomy, AI - potentially, and others) which give opportunities for new players, and an incredible amount of recently created wealth looking for new growth opportunities in China and India and you have the recipe for a massive shift in balance.

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