Understanding the rise of technology in China

How should global business leaders approach the meteoric rise of technology in China? Some observers in the West have taken a zero-sum, us-versus-them approach, while others view the growth of the Chinese tech industry more optimistically, arguing that the development of new technologies can benefit people everywhere. Is.

Both mindsets are understandable—but either can be taken too far. To be effective, leaders must take a more measured approach.

Five recent books explore these competing narratives, which shed light on China’s transformation into a global tech leader, the areas in which the country still lags behind, and how leaders are embracing positive technological advances and mitigating real geopolitical risks. Can navigate the tension between doing. This.

Any discussion of tech in China would be incomplete without considering Tencent, the company behind WeChat (the super app that serves as the home base for social media, payments, gaming and other functions for one billion monthly active users. works). The speed and scope of Tencent’s growth since its founding in 1998 can be difficult to fathom—but journalist Lulu Chen’s Empire of Influence: The Story of Tencent and China’s Tech Ambition The CEO takes us behind the scenes to share the story of Pone Ma, who has gone global from humble beginnings. Chen describes a shy, curious programmer who is nervous about speaking in front of a crowd but spends countless sleepless nights trying to overcome every obstacle that stands in the way of success. Some of these obstacles, such as aggressive government censorship and unpredictable regulatory changes, are undoubtedly specific to the Chinese context. But Chen’s compelling and relatable narrative portrays Ma as “multiple, conflicted, and almost irritatingly self-aware… a quiet but fiercely persistent force that brings people together, many of whom she considers her own. Thinks smarter than he reckons to fulfill the vision.” Her image serves as a powerful reminder that the West has no monopoly on inspirational entrepreneurs.

Of course, the story of tech in China is one of changing political and economic realities. I The Cashless Revolution: Reviving China’s Money and Ending America’s Hegemony in Finance and Technology, Financial researcher Martin Chorzempa examines how these forces informed the growth of both Tencent and its rival Alibaba, and in particular the development of digital payment systems. He asserts that in the early 2010s a backward financial structure and weak regulatory stance opened the door to game-changing innovation that catapulted China from a cash-only economy to a world leader in mobile payments, and the West. Left to play catch up. But he also noted that the Chinese government has recently reasserted control over these tech giants, making it clear that digital money — which many envision as a libertarian force — Can also be used for monitoring and control. Ultimately, Chorzempa suggests that China’s vision of fintech is designed as a system that “places security and money supply, monitoring the financial system, and monitoring its population above all sovereign priorities of the state.” “central power for” fundamentally contradicts social values. The United States, and other liberal democracies, pose a major challenge to any Western efforts to emulate China’s rapid growth in this sector.

Corporate strategist Handel Jones draws a similar picture of artificial intelligence from his four decades of experience in tech and defense. When AI Rules the World: China, the US, and the Race to Control the Smart Planet. He argues that its unique regulatory and economic context has enabled China to outpace the West in AI applications as wide-ranging as healthcare, virtual reality, and self-driving cars. “China,” he writes, “with its long-term goals and the ability to turn those goals into reality, had a distinct advantage over a system driven solely by market forces.” Jones concluded that “the United States simply does not have a master plan” guiding the development of its critical AI capabilities. Consequently, he writes, “By 2030, China will be firmly ahead of the US in AI. In 2040, large parts of society will be under AI control, and it will be too late.”

Although Chorzempa and Jones both describe China’s rise as a threat to the West at large, this is not the only possible interpretation. I Chip War: The Battle for the World’s Most Fragile Technology, Economic historian Chris Miller suggests that when it comes to semiconductors—the key component of all digital technologies—the West may still have the upper hand. He described China as “surprisingly dependent” on chips made in Silicon Valley and manufactured in the US and its allies. [its] The most important technology [resting] On a delicate base of imported silicon. In response, China is trying to increase domestic production—but Miller says the world is still so dependent on a core technology that its supply chain is “full of choke points,” continuing international cooperation. It is in everyone’s best interest. For example, he notes that a major military conflict in Taiwan (home of the largest chip maker) could lead to mutually assured economic collapse that is unlikely to happen.

I The Power of Crisis: How Three Threats—And Our Responses—Will Change the World., Political scientist Ian Bremer agrees that both the US and China have “a lot to lose from a catastrophic confrontation.” He acknowledges a variety of technological threats—ones that separate Chinese consumers and the rest of the world—from China’s growing investment in AI-powered weapons and cyberwarfare capabilities that tip the balance of military power. may change—but ultimately expresses a cautious optimism. that the international community must find a way forward that embraces “practical cooperation, development, and peace.” Bremer concludes that disruptive technologies are creating threats that “no nation can solve alone.” Sakti” and therefore “the aim here is not to ‘defeat’ China but to encourage it to work with the rest of the world.”

Whether you see it as a threat or an opportunity, the growth of tech in China is undeniable. Western political and business leaders cannot afford to be blindly negative or positive about it. Instead they must work to understand and meaningfully engage with the world of Chinese technology — or risk being left behind.

A version of this article appeared in the September-October 2022 issue. Harvard Business Review.

Leave a Comment