During the Web Summit in Doha, Dr. Gang Lu explores the factors driving China’s rapid tech industry growth in the past decade with Harry Man, Partner at Matrix Partners China, and Cindy Chow, Executive Director & CEO at Alibaba Hong Kong Entrepreneurs Funding. Their thought-provoking discussion centered on “The Industries Driving China’s Growth”.
This brief synopsis encapsulates the key insights and standout moments from their dialogue. The full video interview is readily accessible below. The conversation also delves into the trend of Chinese companies going overseas, the challenges for business models in China, and other tech-related questions.
Panel Insights Summarize
Dr. Gang Lu: Can you share with us what you think of the past 10 to 15 years? What kind of key factor drove China’s tech industry so fast?
Harry Man: First of all, people are getting richer to understand they have a lot of money that they can spend. Then, the internet penetration has been up to scale that everybody will get access to fast internet and the third thing is the creation and the penetration of smartphones. These three things create the golden 10 years that we’ve been experiencing from 2008 to 2018. China is very lucky to be in the market. We are rich enough. We have spare time. We can spend and then have the right engineers in the market to create all these apps that create the entire market booming.
Cindy Chow: We also see a similar trend. The takeoff is initially very slow but with the efforts from VC and also the efforts from the government inputting in a lot of money to kick start the ecosystem, we see the growth is gaining a lot of steam in the last few years.
Dr. Gang Lu: If you look at the next 10 to 15 years, do you think there will be a lot of changes in China?
Harry Man: I think one of the most important things is the economy is changing and growing and the needs for the government and the entrepreneurs at the same time for the users and users have been changing moving alone with the growth of the economy. I wouldn’t always say that geopolitical is putting a stop or a barrier sometimes it is encouraging and giving out new opportunities to entrepreneurs to start their businesses and to be a little bit more active. Now, the world has been changing. Chinese national strategy is mainly encouraging a lot of deep tech and AI because we want an ecosystem to be self-sufficient.
Cindy Chow: The industries we see a shift and then geographically we also see a shift that used to be in Beijing, or Shanghai Yangtze River Region. But I’m pretty confident with the prospect of the Greater Bay Area which is close to Hong Kong.
Dr. Gang Lu: We see more and more Chinese companies, especially tech companies, they are going out of China. Do you think that will be the new opportunities for investors?
Harry Man: This could be the next wave of potential Chinese companies to go overseas. Nowadays, things have been changed. Many of these companies wanted to start fresh to be international from day one. There are a lot of deep tech companies going overseas as well.
Cindy Chow: We have a term called sea turtle, Chinese some who study or live abroad and then return to China to start their own business. But right now we are seeing that sea turtle who used to have relocated back to China trying to go overseas.
Dr. Gang Lu: We always see we invest in a Chinese company to help them to go overseas. But do you think that’s another trend we invest in overseas startups and then bring them to China?
Cindy Chow: I guess that’s possible and perhaps the Greater Bay Area could be one of the opportunities.
Dr. Gang Lu: Which particular sector of AI are you looking at and the most interested in right now?
Harry Man: The business model of OpenAI does not work in China and enterprise services are tough. On the other hand, there is another angle that works in China which is using the fundamental foundation models to create use cases and applications in the Chinese market.
