China's Parallel Tech World

Sooner or later, every journalist who goes to China as a correspondent will be confronted with a downright shocking imbalance. While the societies of East Asia follow the cultural, social and scientific achievements of Europe with curiosity, their inquisitiveness is generally reciprocated by an attitude of demonstrative disinterest on the part of the West.

The widest gap between prejudice and reality may be in the area of technological development. Even in the executive suites of German companies, one often hears it said that the Chinese simply don’t have what it takes to be creative. The outdated assumption that the People’s Republic only produces cheap electronics is just as widespread. It’s actually rather frightening that we hardly notice what’s going on in China – the country that is home to nearly one-fifth of the world’s population and generates one third of global economic growth.

Virtually unnoticed, the Sleeping Giant has transformed into a technological macrocosm that is already a leader in many areas, from e-commerce and the Internet of Things to electric mobility. Or did you already know that half of the world’s electric cars are driving on Chinese roads? That the three most valuable tech IPOs in the past year were issued by Chinese companies? Europe, on the other hand, is not even represented in the top 10.

But let’s take a step back: Thinking outside the box is certainly not one of the strengths of “old Europe.” Just how strong the Old World’s ignorance is was revealed most recently by the Coronavirus epidemic, when successful measures in East Asia were either completely swept under the rug or categorically dismissed as “Orwellian” in an immediate defensive reflex.

We have a similar blind spot when it comes to technological innovations. While we are always looking West toward Silicon Valley, we hardly register the many start-ups in Beijing and Shenzhen. Experts have long warned that this short-sightedness could cost us our global competitiveness in the long term. It would almost be an ironic joke of history if Europe were to make the same mistake that ultimately led to the downfall of China in the 19th century: Looking inward, it was blind to innovations outside its own borders.

Communism meets business

China’s internet empires are often described with comparative attributes to make them easier for Western audiences to understand. The e-commerce giant Alibaba is referred to as “Chinese Amazon” and Tencent becomes “Chinese Facebook.” But these analogies don’t tell the whole story, and are often even misleading. China’s tech companies have created a macrocosm that is more comprehensive and far-reaching than any equivalent abroad.

Alibaba, for example, not only sells merchandise on its online platforms, but has long since integrated everyday services of all kinds, from taxi fleets and car repair shops to hairdressing salons. And with its hybrid app WeChat, Tencent has created a tool that encompasses much more than simply communication. People in China use it to pay their electricity bills, insurance premiums and taxes, as well as to buy movie tickets and make doctor’s appointments.

To outsiders, this may seem paradoxical. Authoritarian China, of all places, whose leader Xi Jinping peppers his flowery speeches with quotations from Marx, is leading the way in digital commerce. Beijing, of all places, where “committees” with red armbands patrol their neighborhoods, is experimenting with the world’s first state-owned digital currency. Contradictions like these seem irreconcilable – while China's government presents itself as “communist” to the outside world, the pragmatically inclined population primarily follows the ideology of money.

Or as Qiu Ye, a 45-year-old self-made-entrepreneur from Wuhan, puts it: “Chinese people are more pragmatic than the people in the West, who are more interested in self-actualization and setting themselves apart. We want to improve our lives above everything else – and make more money.” With 90 full-time employees, Qiu teaches the net-savvy population how to build their own business model online. More than 30 million people follow his videos on social media. At the same time, Qui Ye displays on his office desk a flag with a hammer and sickle – the symbol of the communist party.

Indeed, the party itself is now promoting technological innovation through systematic investment. The state-controlled media proudly report on the country’s most booming industry – live-stream shopping. The concept is not exactly new; it’s similar to conventional tele-shopping as popularized in Germany by the QVC broadcasting company. But the online version is considerably more interactive. Live and in real time, young people use their smartphone cameras to present products that viewers buy using their own smartphones – and in many cases the purchases are delivered to their door the same day.

The biggest star of the streaming scene, a 34-year-old woman named Viya, set a record when she generated the equivalent of 350 million euros in sales on “Shopping Day” in 2019. At the same time, however, live-streaming is also playing an important role in the battle against poverty. Many overlooked village communities in mountainous rural areas have achieved considerable prosperity now that they are able to sell their agricultural products directly to wealthy customers in Shanghai and Beijing.

Sampling instead of copying

On the other hand, the prejudice mentioned at the beginning of this article about Chinese companies merely copying ideas from the West is not entirely false. In China, copying is not regarded with contempt but rather seen as a necessity. If you base your start-up on an existing business model you have de facto outsourced the task of market research to your competition – and saved your investors a pile of money. Originality is valued far less than perfecting existing ideas. But instead of the theft of intellectual property, this is more like what the hip-hop culture calls “sampling” – lifting musical elements from well-known hits, then tweaking and manipulating them to create new beats.

In this respect, Chinese tech culture is nothing new. As early as the 19th century, Prussian Germany was imitating traditional English products, and South Korea also began its meteoric rise by replicating its neighbor Japan. The same goes for Silicon Valley, where start-up gurus like to trumpet their own originality while copying each other excessively. The best example of this is the Instagram “story” format, which appeared in a similar form on Twitter and Facebook shortly thereafter.

And in the future, Western tech companies may increasingly take inspiration from the ideas of their competitors in China. It would be in their own best interest.

Cover Image: Getty Images