China Is Nationalizing Its Tech Sector • Hacker News Board

Re: China Is Nationalizing Its Tech Sector

#111

Post by dnomad » Sat, Apr 14, 2018, 4:17 PM UTC

reeedom wrote: post #74

Actually this is not even close to nationalization. The article's title is misleading even by the standard's of the article, which goes on to call it, "quasi-nationalization". But even that is misreading the situation. The objective is not "control" of the tech sector as the article pretends, it is just greater collaboration. So the state and tech companies can both benefit. The state doesn't want the burden of takin…

Yes this is HN so expect relentless and ignorant anti-China sentiment. Just ignore it.

What's happening in China is extraordinarily interesting. Nationalization is not the goal. The government has invested enormously in tech. And it's not just a matter of money, the government has rebuilt whole cities in order to house the growing number of tech workers. (What's happening in San Francisco would never happen in China.)

It's a level of government investment not seen since the US gave it's military-industrial complex a blank check in the 50s and the 60s. And this is exactly what China is trying to copy: just like those massive US investments led to world changing innovations like Silicon Valley and the internet itself, China is going its own investments will produce similarly huge innovations around AI and much else. The goal here is not to produce a few unicorns here and there or to have a Chinese version on FANG but to produce another transistor or Internet. This is what's necessary to produce whole new paradigms and whole new markets and will ultimately generate the real lasting wealth and power that the Chinese think they need to "take care of everybody."

The interesting thing is that this money isn't being tunneled through the military. China is handing money straight to the technologists.

It'll be interesting to see if it pays off. The biggest problem in Chinese tech is not the enormous stream of government money but that it is still very insular. What China is missing that the US had in its hey day was very open borders that allowed the best and the brightest scientists and entrepreneurs from all over the world to come and put all that money to good use. The danger here is not simply that Chinese tech will fail to penetrate other markets but that it will fail to even really innovate due to lack of global input.

Re: China Is Nationalizing Its Tech Sector

#112

Post by tmalsburg2 » Sat, Apr 14, 2018, 4:19 PM UTC

loceng wrote: post #105

tmalsburg2 wrote: post #68

Earlier quoted context omitted.

Since when is China part of "continental Europe"?

Upvoted you as I don't think people should be downvoted especially for misunderstanding/misinterpreting what someone said..

Thank you. Although to be honest, I did not misunderstand OP. My comment was just a lazy (and therefore impolite) way to point out that things may be different in China compared to Europe and that OP's comment may not be a relevant response. As such my comment may actually deserve downvotes. I will try to do better in the future.

Re: China Is Nationalizing Its Tech Sector

#113

Post by iguy » Sat, Apr 14, 2018, 4:23 PM UTC

throwaway414 wrote: post #108

alehul wrote: post #55

Earlier quoted context omitted.

As someone with parents who experienced the USSR, this is what really terrifies me about China's rise, and the reason I can't say I'm against a trade war if it hinders them more than us. Imagine a world in which China holds more control... a country with little legal or social respect for individualism, where your fate is 'centrally planned' by how impressive your maths skills are. By contrast, ~30% of American billi…

> By contrast, ~30% of > American billionaires > are dropouts. How is it a contrast when more than ~50% of Chinese billionaires are dropouts? [1] Added to that, of the 78 self-made women billionaires, 49 of them are from China. [2] 1. http://en.yibada.com/articles/195121/20170220/new-hurun-list... 2. http://www.scmp.com/business/china-business/article/2117158/...

The claim about American dropouts is about success not needing the blessing of the establishment. How many of those billionaires aren't Party members?

Re: China Is Nationalizing Its Tech Sector

#114

Post by TangoTrotFox » Sat, Apr 14, 2018, 4:26 PM UTC

alehul wrote: post #55

phyalow wrote: post #4

A picture is worth a thousand words. The sculpture outside the front of Tencents Shenzhen HQ. https://pbs.twimg.com/media/DXRIsWrVQAAJgjl.jpg

As someone with parents who experienced the USSR, this is what really terrifies me about China's rise, and the reason I can't say I'm against a trade war if it hinders them more than us. Imagine a world in which China holds more control... a country with little legal or social respect for individualism, where your fate is 'centrally planned' by how impressive your maths skills are. By contrast, ~30% of American billi…

I think that's a severe misrepresentation of China. They're communist in name, but extremely capitalist in practice. Jack Ma is the man behind Alibaba and now one of the richest people alive, let alone Chinese alive. Check out his background [1].

In my opinion, the main difference between China and the US is nationalism. And that's also what I think that slogan is indicative of. It also, I think, explains their government actions. Supporting their companies is not about nationalizing them, which implies a motivation of state driven control, but growing and improving Chinese companies on the national scene.

I think we have a great analogy in the US today versus the US in the past. Think about our space program in the 60s. We dumped immense amount of money into US companies and managed to, in 7 years, go from having never even put a man into orbit to putting a man on the moon. The primary motivation there was nationalistic - showing how kick ass America, and implicitly capitalism, was.

Compare that space program to today where there's no real nationalism. Now a days we're building the Space Shuttle 2.0, known as the SLS. And we've spent 8 years on it so far, obscene amounts of money, and it's still not going anywhere. The thing is now the motivation for the spending is not about America, but about a handful of congressmen using it as a job's program for their election campaigns, and of course shelling out kickbacks everywhere. If we handed out a fraction of the SLS money to a private company like SpaceX we'd have a man on Mars in the 2020s, but again - the goal is no longer about America or space. It's become about the individual, instead of the nation.

So essentially I think China's goal here is not state control, but about showing dominance of the Chinese system. If there is any problem with the American system it's that I think we've become somewhat conservative with ideas. Elon Musk's ideas should not be as unique as they are. I mean they aren't - everybody has them, but funding for revolutionary ideas seems (based on the lack of these sort of companies) to be much more difficult to come by. Ostensibly it makes sense. Investors want to invest in things likely to turn a profit, and investing in something that's never been done before is not the easiest EV to predict. But with our technology and wealth today we could be doing so many much more interesting things than we are.

[1] - https://en.wikipedia.org/wiki/Jack_Ma

Re: China Is Nationalizing Its Tech Sector

#115

Post by yorwba » Sat, Apr 14, 2018, 4:27 PM UTC

AmericanChopper wrote: post #22

kome wrote: post #10

Earlier quoted context omitted.

> Central planning has always proven to be an inefficient way to allocate resources Amazon seems pretty efficient. ;)

I think you don’t know what central planning means. It refers to a centrally planned economy, which has many problems to overcome that a single entity like Amazon doesn’t. Once a company gets large enough, some of it’s inefficiencies can be caused by similar issues that centrally planned economies face, however the two are very different. Amazon still has to contend with market forces, and its resource allocation dec…

A centrally planned economy is still subject to market forces. They manifest as the effort required to implement the central plan.

The difference between centrally planning your household finances, a company or a whole country is really just one of scale. Because the plan can allocate internal resources arbitrarily so long as the external forces are matched out, it's possible for this internal allocation to be wildly imbalanced. But if you're personally overspending on some item, you're going to feel that pretty quickly, while a corporation might sink a lot of money into a doomed project before it gets axed, and a country can spend decades before correcting. The larger an organization is, the longer it takes for a pressure felt at just one part of the organizational border to propagate far enough that it affects the overall plan.

This is actually less a problem of central planning than of an aversion to change the plan. In a market, there is little attachment to other participants, and if a better supplier for something pops up, nobody has any qualms about switching to them. But most companies would hesitate much more before cutting an internal department than they would if it were just a question of hiring a different contractor. Because changing the plan feels like admitting failure, inefficiency creeps in.

So central planning could actually work, but you would have to continually adapt the plan to changing circumstances. The end result might look a lot like a market economy, though.

Re: China Is Nationalizing Its Tech Sector

#116

Post by jnordwick » Sat, Apr 14, 2018, 4:38 PM UTC

k__ wrote: post #43

smaddox wrote: post #29

Earlier quoted context omitted.

Communism didn't fail for lack of top-down control. It failed because of too much top-down control (to oversimplify to the extreme).

I had the impression it failed because the planning was bad. So the logical consequence for me would be, if the plans were outdated, better IT would allow to change them faster.

This is the hubris of every technocrat.

Re: China Is Nationalizing Its Tech Sector

#117

Post by jorblumesea » Sat, Apr 14, 2018, 4:49 PM UTC

TheRealmccoy wrote: post #66

Provide incentives and support to local companies to become multi-unicorns (BATs etc). These companies start investing in other leading startups, scross the globe and have substantial stakes in them. Then, nationalise these companies and you have then indirect control/semi-control/access over vast majority of leading startups across the globe. This seems to be a nice move by Chinese government.

But, where does the next wave of innovation come from? More startups?

Just seems like China's steal/nationalize everything doesn't create true innovation centers.

Re: China Is Nationalizing Its Tech Sector

#118

Post by watertom » Sat, Apr 14, 2018, 4:51 PM UTC

All tech companies need to re-think manufacturing in China, it was always a risky proposition, but not, you'll really be handing your IP over to the Chinese Government, and they'll be collecting IP from every company.

It's time for tech manufacturing to move.

Re: China Is Nationalizing Its Tech Sector

#119

Post by nbsd4life » Sat, Apr 14, 2018, 5:03 PM UTC

alehul wrote: post #51

AmericanChopper wrote: post #6

Earlier quoted context omitted.

Central planning has always proven to be an inefficient way to allocate resources, so I’m not sure why free markets would be worried about China implementing more central planning.

As a side note, here's an argument from Paul Graham regarding central planning (when writing about MIT and Harvard): > [1] This is one of the advantages of not having the universities in your country controlled by the government. When governments decide how to allocate resources, political deal-making causes things to be spread out geographically. No central goverment would put its two best universities in the same t…

It's easy to speak against government funding with a $40 billion endowment, which is higher than the GDP of some countries.

Re: China Is Nationalizing Its Tech Sector

#120

Post by crdoconnor » Sat, Apr 14, 2018, 5:09 PM UTC

adventured wrote: post #95

dalbasal wrote: post #32

The "trade war" thing has been the most/only interesting ideas to come from trump, to me. It was interesting in that he did recognized (fluked into?) an actual shift in public/expert position. China is the pro-trade side. They'll be willing to make concessions, do the work, etc. It's the beijing consensus now, not washington. Large american companies are still on the pro-trade side, being multinationals. They also ha…

> China is the pro-trade side. They'll be willing to make concessions, do the work, etc. It's the beijing consensus now, not washington. China isn't pro trade per se. They're pro export, in the old mercantilist sense. They've spent the last 30 years heavily restricting trade access into and within China by foreign entities. They'll amass around a $900 billion to $1 trillion trade surplus with the EU over the five yea…

>the West keeps falling for it for some reason

The west acted as if mercantilism basically couldn't work. Ricardian theory of comparative advantage was elevated to near-religion status in the 90s and early 00s.

China not opening up fully was seen as an aberration that would ultimately only harm China rather than a potential long term threat. That was the prevailing attitude among policymaking circles (you can see this attitude reflected by checking old issues of The Economist).

Ultimately the fact that lots of profit could be made out of managed Chinese trade kept western countries from reacting in a sensible, self-interested manner.