China is winning the global tech race

ebikes, scooters, and hoverboards were all out of china.

Europe needs to build its own tech ecosystem instead of being a resource hub and market for US companies. There were some sense in the French driving Peugeot, the Germans VW and the Americans Ford, instead of all driving a generic car from a distant silicon valley company far away from local market and value chain.

According to the article, China is winning because it has more unicorns than others in > 10 billion: 11 are Chinese vs 6 are American. This is just VC pumping its own game.

Massively overvalued Chinese startups fueled by unsustainable shadow debt taking isn't a recipe for success.

"China’s campaign against its US$10 trillion shadow banking industry has choked off refinancing for the weaker borrowers". let that sink in......10 Trillion debt that needs to be unwound in China, mostly corporate debt.

"Chinese corporate debt to GDP ratio is already very high by international standards – at 168 per cent in 2017 – and is expected to start rising again as nominal GDP growth declines towards the 8 per cent from an unusually high rate of over 11 per cent in 2017, Fitch said. Further payment problems are likely in a market that has already seen at least 14 corporate bond defaults this year"

http://www.scmp.com/news/china/economy/article/2149108/curbi...

Also, this is happening in times of economic slowdown in China, due to trade wars, tariff from US, reshoring of manufacturing back to US, declining FDI, etc.

"China's economic growth slows to multi-decade lows across industrial, infrastructure and retail"

http://www.abc.net.au/news/2018-06-14/china-growth-stumbles-...

"Two-thirds of the 21 tech IPOs in the past year are below their issue price, with shares down an average of about 20 per cent through Friday. Leading the wipe out are online financing platforms Qudian Inc and PPDai Group Inc, which plummeted 55 per cent and 48 per cent respectively, while search engine Sogou Inc has tanked 27 per cent."

http://www.scmp.com/tech/article/2146122/struggling-chinese-...

TFA is blocked. Does it talk about protectionism, cronyism, poor IP enforcement, restrictions on foreign media and communication companies, or forced technology transfer from foreign firms as a condition of doing business in China? These aren't the only factors behind China's rise as a tech superpower, but without them China wouldn't be where it is today.

Author is Sequoia's Michael Moritz who has a decent amount of credibility here. I think his last few articles on China have been more around warning US tech companies not to get complacent, rather than trying to convince people that China is a tech holy land.

As for the part about being an uneducated factory nation, the latest PISA findings from 2015 would have China scoring higher than the US on math (10th vs. 25th) and science (6th vs. 40th), but slightly lower than the US on reading (27th vs. 24th).