Are Chinese Tech Companies To Surpass Their Silicon Valley Counterparts?

(Chinese Version)

The competition between China and US, especially the Silicon Valley, has always been the focus of public attention. In a recent interview with CNBC, Robin Lee, founder, chairman and CEO of Baidu, he pointed out that although the largest internet company was still based in the US, Chinese tech companies already possessed strong competitive edge and innovation ability.

Indeed, Chinese tech companies have been developing at an amazingly rapid speed in recent years. With the gap between China and the US on innovation and technology narrowing, some Silicon Valley companies have, in turn, started to learn from their Chinese counterparts.

How did Chinese tech companies manage to catch up with, or even surpass Silicon Valley companies in recent years? Maybe we can see such change from the following three aspects:

The need for upgrading traditional business

In the primary stage of the PC era, while American companies possessed all the major hardware and software cutting-edge technologies and have a large say in the global tech industry, Chinese companies lagged far behind for a long period of time. However, such situation changed with the advent of the internet era.

In the prime stage of the PC era, when American tech companies, including Google, ebay, msn, mcafee, etc. all failed, their Chinese counterparts, such as Baidu, Alibaba, Tencent and Qihoo 360, etc. seized the opportunity and managed to establish their own position thanks to their better understanding of the Chinese market. This was the first time Chinese tech companies began to catch up with their American counterparts in large scales.

However, Chinese tech companies were still more like students who can only “copy” from their American “teachers” at that time. In the mobile internet era, however, some Chinese tech companies began to surpass their “teachers” and even originally create lots of products that had no counterparts in the US, such as WeChat, Xiaomi, Wifi Master Key, O2O platforms, Takeaway platforms, etc.

How come? Fundamentally, this has to do with the special national situations of China such as backward traditional business, poor infrastructure, huge demographic dividend, etc. Different from the primary era of PC, when hardware and software can both be standardized, Chinese tech companies get the opportunity to focus more on details and upgrade traditional business and infrastructure accordingly. Coupled with the huge population dividend, Chinese tech companies get the opportunity to rise rapidly.

The eager for survival and success

In the past two years, the Chinese tech industry witnessed an unprecedented wave of merger and acquisition, including Youku and Tudou, 58.com and Ganji.com, Meilishuo.com and Mogujie.com, Ctrip and Qunar, Didi and UberChina, etc. Never had there been a time in the US when tech companies merged so frequently.

How come? The fundamental reason is that competition among American tech companies isn’t as extreme as that in China. In the US, when a company develops a new product, its counterparts won’t “copy” and rush to develop something quite similar. Furthermore, tech giants, restricted by Anti-Monopoly Law, also won’t develop similar products.

In China, however, there are at least two similar companies providing similar products in almost all areas. Besides, since Anti-Monopoly Law is not as strict as that in the US, tech giants will also seize every opportunity, develop similar products, compete with rivals and manage to dominate the market with the help of their huge traffic and rich resources.

Take for example live video streaming. At first, there were only 17 live video streaming platforms in China. However, after Inke TV rose to popularity, the entire Chinese tech world began to focus on live video streaming and every major player competed to develop its own live video streaming platforms. Tencent even went to extreme and develop or invest in several live video streaming platforms, including NOW, QQ Zone TV, Huayang TV, Longzhu TV, etc.

On the surface, such environment might not be favorable for innovation and entrepreneurship. It turns out, however, that the fiercer competition is, the more tenacious startups will become, and the less likely they will easily give up.

For example, many pundits were not optimistic about Momo and Sina Weibo’s future development. However, after they started carrying out live video streaming service, they became so popular and Sina Weibo’s stock price even doubled. While American tech giants such as Twitter were still looking for buyers, Chinese tech companies were still making attempts to save themselves.

The sense of insecurity & the focus on technology

In addition, many Chinese tech companies become even more aware of the importance of technological development. They come to realize that only when they develop some technology of their own can they compete with their foreign counterparts. Such mentality, that is, to get prepared for danger in times of peace, makes Chinese tech companies attach higher importance to technology.

A case in point is Baidu. Baidu has always been known as a pioneer in cutting-edge technology. Its speech recognition, image recognition and natural language understanding technologies have already reached the intelligence level equal to a five-year-old kid.

Last year, its deep learning speech recognition technology, together with other cutting-edge technologies such as nanometer technology, biotechnology, aerospace technology, were even listed one of the top ten cutting-edge technologies by MIT, making it the only Chinese tech company selected. At the same time, Baidu has also been actively developing unmanned driving technology and is the first company allowed to do related testing both in Asia and in the US.

Huawei is also a typical example. As a matter of fact, Huawei has already surpassed CISCO and became the number one seller of network machines such as switchboards. In addition, it has already done a great job in smartphone developing abroad and at home.

Moreover, Alibaba’s Alicloud has been competing with Amazon’s AWS and has also been making efforts in areas such as speech recognition and image recognition, as did Tencent. Other Chinese tech companies such as IFLYTEK and DJI-Innovations, also known for their cutting-edge technologies, have also begun to have a larger say in the global tech industry and play a role in both overseas and domestic markets.

Conclusion

To wrap up, Chinese tech companies are developing at an unprecedented speed. They need to know not only how to upgrade traditional Chinese business and infrastructure, but also how to tenaciously survive in face of fierce competition. Such eager for survival and even success will bring Chinese tech companies back to the technology-driven business path.

Indeed, the gap between Chinese tech companies and their Silicon Valley counterparts is narrowing.

…………………………………………………………………………………………………

(Like our Facebook page and follow us now on Twitter @tmtpostenglish, Medium @TMTpost and on Instagram @tmtpost_english and Apple News@TMTpost.)

[The article is published and edited with authorization from the author @Chengzhe please note source and hyperlink when reproduce.]

Translated by Levin Feng (Senior Translator at PAGE TO PAGE), working for TMTpost.